US stock futures were mixed on Wednesday as optimism over a possible Middle East agreement supported the Dow and S&P 500, while post-earnings selling in SpaceX and AMD weighed on the Nasdaq.
At 7:00 am ET, Dow futures rose 195 points and S&P 500 contracts gained 0.41%, while Nasdaq 100 futures slipped 0.02%.
The split followed record closes for the Dow and S&P 500 on Tuesday, but investors were already turning to July private-payroll and services data, fresh Federal Reserve commentary and another crowded earnings slate for clues on whether the broader rally can withstand a more selective technology trade today.
5 things to know before Wall Street opens
1. Record highs meet a narrower technology trade
Tuesday’s rally pushed the Dow and S&P 500 to record closes, helped by strong earnings and optimism that Washington and Tehran may be nearing an agreement on shipping through the Strait of Hormuz.
The diplomatic backdrop remains fragile. Iran has disputed claims of direct peace negotiations, while attacks on regional shipping have continued.
Oil rebounded on Wednesday after a Houthi strike on a Saudi tanker, showing that the inflation relief from Tuesday’s crude sell-off could reverse quickly.
2. SpaceX growth is eclipsed by the spending bill
SpaceX shares fell about 10% before the bell even after quarterly revenue rose 92% to $7.8 billion and its net loss narrowed to $541 million.
Starlink and other connectivity operations generated $4.29 billion of revenue, while subscribers doubled from a year earlier to 12 million.
The concern was capital intensity. SpaceX spent $18.37 billion during the quarter, including $15.83 billion on AI infrastructure.
The approaching start of post-IPO lock-up expiries on Thursday adds another technical risk by increasing the potential supply of shares.
Verizon and AT&T also fell more than 2% after SpaceX outlined ambitions for a broader mobile service, raising competitive concerns for established telecom operators.
3. AMD proves demand is strong, but margins remain the test
AMD reported record second-quarter revenue of $11.54 billion, up 50% from a year earlier, while adjusted earnings reached $1.66 a share.
The company forecast third-quarter sales of $12.7 billion to $13.3 billion, above market expectations.
Yet AMD shares dropped about 8.1% as investors focused on an adjusted gross-margin forecast of 56%, unchanged from the second quarter despite another expected rise in revenue.
The reaction suggests the market now wants proof that AI demand can expand profitability, not simply sales.
Nvidia gained about 1.9% after SpaceX indicated it would use the company’s hardware exclusively in its data centres. Intel and Micron each lost roughly 1.5%.
4. Labour and services data could reset rate bets
The ADP private-employment report is due at 8:15 am ET, followed by the final S&P Global services PMI at 9:45 am and the ISM services index at 10 am.
Employment and prices-paid measures will be watched for evidence that labour demand and services inflation remain firm.
Traders assigned a 58.4% probability to a quarter-point Federal Reserve increase in September.
Kansas City Fed President Jeff Schmid said further tightening may be needed to return inflation to 2%, while Governor Lisa Cook and San Francisco Fed President Mary Daly are also scheduled to speak.
Strong data could lift Treasury yields and pressure growth stocks. Softer figures would support bonds, though a sharp slowdown could revive concerns about economic momentum.
5. Disney and Lilly lead a crowded earnings day
Disney, Eli Lilly, Uber, CVS, Honeywell, Kraft Heinz and Shopify are among the companies reporting before the opening bell.
Disney’s update will test streaming profitability and theme-park demand, while Lilly’s results will provide another read on the obesity and diabetes drug market.
After the close, attention shifts to SanDisk, Western Digital and eBay.
SanDisk and Western Digital are particularly important for the AI infrastructure trade because investors have priced in strong storage demand, higher memory prices and limited supply.
Wall Street’s record run therefore faces a broader examination than the mixed futures imply.
Diplomacy is supporting the index level, but SpaceX, AMD, jobs data and another earnings wave will determine whether investors continue rewarding growth or rotate further towards companies with clearer cash returns.
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