U.S. stock index futures suggest a higher open on Wednesday, with major benchmarks poised to gain ground following a mixed close in the prior session.
Investor sentiment received a boost after President Donald Trump revealed new trade agreements with Japan and the Philippines.
The U.S.-Japan pact, described by Trump as the “largest ever” trade deal between the two countries, includes a 15% tariff on Japanese exports. It also outlines a $550 billion investment commitment from Tokyo in the U.S. and greater access for American products like vehicles, rice, and other agricultural goods.
“The U.S. would receive 90 percent of profits from the agreement,” Trump stated, adding that the deal “could generate hundreds of thousands of American jobs.”
Regarding the Philippines, Trump said the new pact would transform the country into an open market with zero tariffs on U.S. goods, though “Manila [would be] paying a 19 percent duty.”
The announcement has fueled speculation that more trade agreements could be finalized ahead of the August 1 deadline.
On Tuesday, stocks opened lower but gradually recovered throughout the session. Although the day ended with mixed results, all three major indexes rebounded from their intraday lows.
The Nasdaq dropped 81.49 points, or 0.4%, to 20,892.69, while the S&P 500 edged up 4.02 points, or 0.1%, to 6,309.62. The Dow Jones Industrial Average rose 179.37 points, or 0.4%, to 44,502.44.
The early weakness was largely attributed to profit-taking, as both the Nasdaq and S&P 500 had hit record highs the day before. Disappointment with certain earnings reports also weighed on the broader market.
General Motors (NYSE:GM) fell 8.1% despite reporting second-quarter earnings that beat expectations, as the results marked a sharp year-over-year decline.
Lockheed Martin (NYSE:LMT) slumped 10.8% following weaker-than-expected revenue for the second quarter.
Trading volume was relatively muted, as the absence of significant economic data led some investors to adopt a wait-and-see approach.
Market participants were also anticipating earnings reports from Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), both scheduled for release after Wednesday’s close.
Housing stocks stood out with strong gains, lifting the Philadelphia Housing Sector Index by 6.7%—its highest close in more than five months. D.R. Horton (NYSE:DHI) led the charge, surging 17% after posting better-than-expected fiscal Q3 results.
Gold stocks also performed well, with the NYSE Arca Gold Bugs Index climbing 3.1% to notch its strongest finish in over twelve years.
Additional strength was seen in oil services, biotech, and steel shares. On the downside, semiconductor, networking, and computer hardware stocks lagged the broader market.
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