U.S. stock futures were pointing higher early Wednesday, suggesting a positive open for Wall Street after Tuesday’s uneven performance.
The bullish sentiment was supported by fresh data from the Labor Department showing that U.S. producer prices were unexpectedly flat in June, helping ease inflation concerns. According to the report, the producer price index for final demand showed no change last month, following an upwardly revised 0.3% increase in May.
Analysts had projected a 0.2% rise, slightly more than the previously reported 0.1% uptick. The data also revealed that the year-over-year increase in producer prices cooled to 2.3% in June, down from a revised 2.7% in May. Markets had expected a smaller decline to 2.5% from the originally reported 2.6%.
Investors were also encouraged by a series of stronger-than-expected corporate earnings reports. Shares of Johnson & Johnson (NYSE:JNJ) climbed 2.1% in pre-market trade after the healthcare heavyweight topped second-quarter expectations and lifted its full-year outlook.
Bank of America (NYSE:BAC) also saw pre-market momentum after reporting earnings that beat estimates. Meanwhile, Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) similarly delivered better-than-expected quarterly results, contributing to the upbeat tone.
On Tuesday, stocks began the day on a strong note but lost steam as the session progressed. By the close, the major indexes were mixed. The Nasdaq Composite managed to notch a new record, rising 37.47 points or 0.2% to finish at 20,677.80. In contrast, the S&P 500 fell 24.80 points or 0.4% to 6,243.76, while the Dow Jones Industrial Average dropped 436.36 points or 1.0% to 44,023.29.
Tech stocks, especially chipmakers, led the way. The Philadelphia Semiconductor Index advanced 1.3% to close at its highest level in a year. Nvidia (NASDAQ:NVDA) played a major role in the rally, jumping 4.0% to a record closing price after revealing it will “soon” resume H20 AI chip sales to China.
“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement.
On the downside, homebuilding stocks sold off, pulling the Philadelphia Housing Sector Index down 3.3%. The energy sector also weakened, with falling oil prices dragging the Philadelphia Oil Service Index 3.1% lower. Losses in banking, biotech, and pharmaceutical shares added to the overall market pressure.
Earlier in the session, a separate report from the Labor Department had lifted investor confidence. Consumer price inflation for June came in line with forecasts, rising 0.3% for the month following a 0.1% increase in May.
Annual consumer inflation accelerated to 2.7% in June from 2.4% in July, just above the expected 2.6% gain. Core inflation, which excludes food and energy, ticked up 0.2% after a 0.1% rise the previous month. Economists had predicted a slightly higher 0.3% increase.
Despite the encouraging inflation data and earnings results, market enthusiasm faded later in the day amid persistent unease over President Donald Trump’s ongoing trade disputes, which continue to cloud the economic outlook.
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