U.S. index futures point to a higher open on Wednesday, as stocks appear ready to recover after a two-day pullback.
Alphabet (NASDAQ:GOOGL) could play a leading role in the early rebound, with its shares surging 6.9% in pre-market trading.
The jump follows a federal judge’s ruling that shields the Google parent from the most severe penalties in a landmark antitrust case.
U.S. District Judge Amit Mehta decided that Google will not be required to divest its Chrome browser or a contingent divestiture of the Android operating system.
“Plaintiffs overreached in seeking forced divestiture of these key assets, which Google did not use to effect any illegal restraints,” Mehta said.
Apple (NASDAQ:AAPL) shares also rose 3.7% in pre-market trading, as the ruling allows the tech giant to continue preloading Google Search on its iPhones.
Trading activity may remain subdued, however, as some investors may hold back ahead of key jobs data scheduled for later in the week.
After an early sell-off, stocks partially recovered during Tuesday’s session but ended firmly lower. The major averages extended the decline seen on Friday.
The Nasdaq fell 175.92 points, or 0.8%, to 21,279.63, though it had dropped as much as 1.5% in early trading. The S&P 500 slid 44.72 points, or 0.7%, to 6,415.54, while the Dow dropped 249.07 points, or 0.6%, to 42,295.81.
The initial sell-off was fueled by renewed trade uncertainty after the U.S. Court of Appeals for the Federal Circuit ruled that most of former President Donald Trump’s global tariffs are unconstitutional.
In a 7-4 decision, the court held that the power to impose tariffs rests exclusively with Congress under the Constitution.
Implementation of the ruling was delayed until October, allowing the Trump administration to appeal to the Supreme Court.
“All tariffs are still in effect! If these tariffs ever went away, it would [be] a total disaster for our country,” Trump wrote on Truth Social.
Treasury yields spiked in response to the ruling amid concerns the government may need to refund billions collected under Trump’s tariffs.
On the economic front, the Institute for Supply Management (ISM) reported a slight uptick in U.S. manufacturing activity for August, though the sector continues to contract.
The ISM manufacturing PMI rose to 48.7 from July’s nine-month low of 48.0, still below the 50 mark that separates growth from contraction. The increase was in line with economist expectations.
Steel stocks led the declines, pushing the NYSE Arca Steel Index down 1.7%, while commercial real estate also showed weakness, with the Dow Jones U.S. Real Estate Index losing 1.7%.
Additional pressure was visible in telecom, semiconductor, and banking stocks, whereas gold and biotechnology shares recorded strong gains.
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