U.S. stock index futures and major benchmarks rose on Wednesday, with the S&P 500 and the Nasdaq 100 reaching fresh highs as investors rotated into technology and artificial-intelligence infrastructure names. The S&P 500 was up about 1.1%, the Dow Jones Industrial Average gained about 1.6%, and the Nasdaq 100 advanced more than 2%, supported by a cluster of better-than-expected quarterly results.
Equities also found support as lower crude prices eased inflation concerns and helped pull bond yields down. At the same time, investors weighed weaker economic data, including a decline in June factory orders and softer job openings, while focusing on earnings momentum and the rate-path expectations ahead of upcoming central bank meetings.
Key takeaways
- Indexes climbed: The S&P 500 rose about 1.1%, the Dow gained about 1.6%, and the Nasdaq 100 added more than 2%.
- Tech led: Semiconductors and AI-related stocks surged after results that beat expectations and included raised guidance.
- Bonds took cues from oil and data: The 10-year Treasury yield fell by roughly 4 basis points as crude prices dropped and some macro indicators came in weaker.
- Economic signals were mixed: June factory orders and JOLTS job openings missed expectations, tempering parts of the growth outlook.
- Implication: The market’s upside bias appears tied to earnings strength and easing rate expectations, even as economic details remain uneven.
What drove the rally
Technology outperformance was the clearest driver of the broader tape. Several large-cap and growth stocks jumped after earnings and guidance updates. Palantir Technologies shares rose more than 27% after it reported stronger-than-expected Q2 revenue and raised its full-year revenue forecast. Zebra Technologies climbed more than 19% following better-than-expected adjusted earnings per share and an increase to its full-year EPS outlook.
Other earnings-related moves reinforced the trend. Caterpillar shares gained more than 5% after reporting Q2 adjusted EPS above consensus. In the semiconductor and AI ecosystem, the Philadelphia Semiconductor Index rose more than 5%, while individual names including ARM, Marvel Technology, SanDisk, Intel, and Advanced Micro Devices logged double-digit or mid-single-digit gains, according to market reports summarized in the trading coverage.
Energy-related weakness, by contrast, reflected the drop in oil prices. The report cited WTI crude falling more than 4% to a three-week low, putting pressure on energy stocks such as Diamondback Energy and APA Corp, and weighing on major integrated producers.
Macroeconomic signals and the oil backdrop
Lower crude prices helped support equities by reducing near-term inflation concerns. Data and market commentary in the coverage linked the move in oil to evolving Middle East diplomacy. Specifically, the report said expectations of progress between the U.S. and Iran increased after a Qatari spokesman indicated a draft for reviving talks had been circulated, although it cautioned that an agreement had not been finalized.
The same coverage referenced additional statements that kept geopolitical risk active, including warnings from U.S. leadership about potential air strikes and calls for reopening the Strait of Hormuz. It also noted operational disruptions in the Red Sea area, including that Yanbu—a key Saudi export port—saw its busiest day on Monday since Houthi attacks began, as more ships moved through the Bab el-Mandeb chokepoint.
On the economic calendar, investors had to digest weaker U.S. data. June factory orders fell 0.3% month over month, below the expected +0.2%, and factory orders excluding transportation declined 0.4% month over month versus an expectation of +0.4%. JOLTS job openings also dropped by 178,000 to 7.359 million, reflecting softness in the labor market relative to forecasts.
The trade deficit widened to $73.3 billion, slightly larger than expectations. The coverage said the reading was a negative factor for second-quarter GDP, adding another layer of caution for growth assumptions even as earnings results supported the equity rally.
Market reaction across rates and overseas trading
Bond markets mirrored the easing inflation narrative from oil and the weaker economic prints. The report said the 10-year Treasury yield declined by about 4 basis points to roughly 4.64%, as crude prices turned lower and investors absorbed softer data including JOLTS and factory orders.
European yields also moved down, with the 10-year German bund yield falling to around 3.11% and the 10-year UK gilt yield around 4.92%, according to the coverage.
Equity markets outside the U.S. were higher. The Euro Stoxx 50 reached a new all-time high, while China’s Shanghai Composite closed up slightly and Japan’s Nikkei 225 finished higher.
Earnings momentum and what investors are pricing
Earnings expectations continued to underpin the rally. According to the coverage, Bloomberg Intelligence forecasts pointed to second-quarter earnings growth of about 23%, near the pace of the previous quarter’s strong performance and well above the 12% analysts had expected earlier. The same reporting added that AI spending is expected to drive a substantial share of S&P 500 earnings-per-share growth in the quarter, with AI infrastructure names projected to contribute nearly 60% of the index’s EPS growth.
Actual results to date also appear to be supporting sentiment. The report cited that 86% of the 322 S&P 500 companies that had reported Q2 results had beaten estimates, using Bloomberg data.
On rates, investors were pricing a relatively high probability of central bank action. The coverage said markets were discounting a 59% chance of a 25 basis point hike at the next FOMC meeting on September 15–16. For the ECB, it cited an 85% likelihood of a 25 basis point hike at its next meeting on September 10.
Looking ahead, traders will likely focus on how additional earnings releases and guidance shape expectations for both growth and margins, alongside upcoming policy decisions and macro releases that could further influence the trajectory of yields. With crude oil still sensitive to geopolitical developments, investors may also watch for further moves in inflation-sensitive rate expectations as new data arrives.
