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Tech Shares Lift Wall Street Pre-Bell; Asia Up, Europe Lower

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Wall Street futures pointed moderately higher pre-bell Wednesday, after ASML (ASML) the giant Dutch maker of semiconductor-manufacturing equipment, reported record Q2 earnings and raised guidance.

In the futures, the S&P 500 rose 0.1%, the Nasdaq inclined 0.4% and the Dow Jones was even.

The VanEck Semiconductor ETF (SMH) traded up 1.2% pre-bell.

Investors also await the producer price index (PPI) report for June, from Washington at 8:30 am ET, likely to provide clues to how higher energy bills are impacting farmers, manufacturers and others.

Federal Reserve Chair Kevin Warsh will testify before the Senate Banking Committee at 10 am ET, following a similar presentation Tuesday before the House. Warsh signaled a commitment to containing inflation, before the lower body.

Asian exchanges traded higher overnight, on tech-sector strength. European bourses tracked slightly lower on the continent.

On the earnings scene, BlackRock (BLK) traded up 4.7% pre-bell after the investment house reported better-than-expected Q2 financial results.

PayPal (PYPL) traded up 19% pre-bell after media reports that Stripe and Advent International, both privately held, have proposed a $53 billion buyout of the payment-system enterprise.

On the economic calendar, in addition to the PPI report, is the Empire State Manufacturing Index for July at 8:30 am ET, followed by the weekly EIA petroleum status report at 10:30 am.

The Beige Book, the Federal Reserve's compendium of business and economic reports from the 12 Fed branches, posts at 2 pm.

Federal Reserve New York President John Williams, St. Louis President Alberto Musalem, and Governor Lisa Cook are slated to speak on Wednesday.

In pre-market action, bitcoin traded at $64,607, West Texas Intermediate crude oil traded up 1.1% at $80.18 and 10-year US Treasuries offered 4.61%. Spot gold commanded $4,031 an ounce.

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Asia Markets

Update: US Equity Indexes Rise as Cooling Inflation Eases Interest-Rate Pressure on Tech While IBM Sell-Off Restrains Dow

(Updates with index/price moves, macroeconomic data, and geopolitical news from the first paragraph.)US equity indexes closed higher on Tuesday after the steepest slide in inflation in more than six years helped lift the Nasdaq Composite and the S&P 500, while a sharp sell-off in IBM (IBM) anchored the Dow Jones Industrial Average.The tech-heavy Nasdaq advanced 0.9% to 26,107.01, and the S&P 500 climbed 0.4% to 7,543.59. The Dow Jones Industrial Average rose by less than 0.1% to 52,508.27.Interest-rate-sensitive sectors, technology and communication services, led gainers in a broad-based rally. Healthcare was the worst performer. IBM sank 25%, the most on the Dow and the S&P 500, after Q2 guidance missed expectations.Looking at gains from the top 20 companies with market capitalizations exceeding $200 billion, half were from the semiconductor industry, according to data compiled by Finviz. The top gainer was SK Hynix, up 27%, following its Nasdaq debut last Friday.The consumer price index fell 0.4% month-over-month in June, the steepest drop since April 2020, compared with forecasts for a 0.1% drop in a Bloomberg-compiled survey and a 0.5% gain in May, according to the Bureau of Labor Statistics. Core CPI, which excludes food and energy prices, held steady, compared with the 0.2% growth estimate, in line with May's growth.The year-over-year rates for overall and core CPI slowed to 3.5% and 2.6%, respectively, from 4.2% and 2.9%. Core services, excluding housing, also known as the super core, saw the biggest sequential slide since May 2020, a Jefferies note said.The probability of the Federal Reserve leaving its policy unchanged in July soared to 83% from 58% a day ago, according to the CME FedWatch tool. The likelihood of the pause continuing over September, October, and December surged.Meanwhile, President Donald Trump withdrew his proposal to charge a 20% toll on cargo transiting the Strait of Hormuz, according to his social media post on Tuesday. "Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States."US Central Command will restart its naval blockade of Iranian ports at 4 p.m. ET on Tuesday.Front-month global benchmark North Sea Brent rose 2.2% to $85.09 a barrel, and US West Texas Intermediate was up 1.9% to $79.59 a barrel, albeit both crude types were off session highs."Resumption of tension in the Strait of Hormuz risks a reversal, but this month's [inflation] data is a step in the right direction for the Fed," Jefferies Chief US Economist said in a note.US Treasury yields fell, with the 10-year down 3.7 basis points to 4.58% and the two-year lower 7.4 basis points to 4.19%.Taking into account the weighting differences between the CPI and personal consumption expenditures baskets, the headline PCE, which is due out in a couple of weeks, is tracking a 0.3% decline month-over-month, according to a Scotiabank note. Core PCE is tracking similarly to the flat core CPI reading.

Dow JonesNasdaq CompositeS&P 500$IBM
Asia Markets

Update: Nasdaq, S&P 500 Rise as Inflation Cools Most in Six Years, Trump Drops Strait of Hormuz Cargo Toll Plan

(Updates with index/price moves, macroeconomic data and company/geopolitical news from the first paragraph.)US equity indexes traded mixed, with the Nasdaq Composite and the S&P 500 gaining, as the June inflation rate fell the most in more than six years and President Donald Trump withdrew plans to impose a levy on cargo transiting the Strait of Hormuz in the Persian Gulf.The tech-heavy Nasdaq advanced 1% to 26,125.4, with the S&P 500 climbing 0.4% to 7,545.1 after midday Tuesday. The Dow Jones Industrial Average bucked the trend, slipping 0.1% to 52,429.5.Technology led gainers, while healthcare was the steepest decliner. IBM's (IBM) shares sank 25%, the steepest decline on the Dow and the S&P 500, after the tech giant issued Q2 guidance below Wall Street expectations.The US seasonally adjusted consumer price index fell by 0.4% month-over-month in June, the steepest drop since April 2020, compared with expectations for a 0.1% decrease in a Bloomberg-compiled survey and following a 0.5% increase in May, according to data released Tuesday by the Bureau of Labor Statistics. Core CPI, which excludes food and energy prices, held steady, compared with the 0.2% growth estimate, in line with May's growth.The year-over-year rates for overall and core CPI slowed to 3.5% and 2.6%, respectively, from 4.2% and 2.9% in the previous month. The "super core", which is defined as core services excluding housing, saw the biggest sequential decline since May 2020, according to a note from Jefferies.US Treasury yields fell, with the 10-year down 2.9 basis points to 4.58% and the two-year lower by 5.7 basis points to 4.21%.Meanwhile, President Donald Trump withdrew his proposal to charge a 20% toll on cargo transiting the Strait, according to his social media post on Tuesday. "Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States."There will be a "FULL Blockade, but only on Ships coming to and from Iranian ports, or carrying anything have to do with Iranian cargo," Trump said on Truth Social.The front-month global benchmark North Sea Brent rose 1.7% to $84.69 a barrel, and the US West Texas Intermediate climbed 1.3% to $79.18 a barrel, off session highs."Resumption of tension in the Strait of Hormuz risks a reversal, but this month's [inflation] data is a step in the right direction for the Fed," Jefferies Chief US Economist said in a note.The probability of the Federal Reserve leaving its policy unchanged in July soared to 83% following the inflation data, from 58% a day ago, the CME FedWatch tool showed Tuesday. The likelihood of the policy pause continuing across September, October, and December also jumped.Further in company news, traders digested the latest round of earnings from mega-cap banks. Goldman Sachs' (GS) Q2 results topped analysts' estimates as a record performance in the global banking and markets business propelled revenue growth. Shares jumped 7.7%, the Dow's leader.JPMorgan Chase (JPM) reported Q2 results above market expectations, driven by higher investment banking fees and markets revenue. Its shares rose 1.9%, one of the Dow's top performers.

Dow JonesNasdaq CompositeS&P 500$GS$IBM$JPM
Asia Markets

Exchange-Traded Funds Higher, US Equities Mixed After Midday Tuesday

Broad Market IndicatorsBroad-market exchange-traded fund IWM and IVV were higher. Actively traded Invesco QQQ Trust (QQQ) added 1.2%.US equity indexes traded mixed, with the Nasdaq Composite and the S&P 500 gaining, as the June inflation rate fell for the first time in more than six years and President Donald Trump withdrew plans to impose a levy on cargo transiting the Strait of Hormuz in the Persian Gulf.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) each lost about 0.3%.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) gained 1.6%; iShares US Technology ETF (IYW) and iShares Expanded Tech Sector ETF (IGM) were each up 1.5%.The State Street SPDR S&P Semiconductor (XSD) increased 1.8%, and iShares Semiconductor (SOXX) climbed 3.2%.FinancialThe State Street Financial Select Sector SPDR (XLF) rose 0.4%. Direxion Daily Financial Bull 3X Shares (FAS) advanced 1.1%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), declined 1%.CommoditiesCrude oil climbed 1.1%, and the United States Oil Fund (USO) moved up 1.2%. Natural gas was unchanged, and the United States Natural Gas Fund (UNG) was up 0.6%.Gold on Comex increased 1.5%, and the State Street SPDR Gold Shares (GLD) rose 1.4%. Silver was up 2%, and iShares Silver Trust (SLV) was 1.7% higher.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) shed 1.1%. The Vanguard Consumer Staples ETF (VDC) declined 1%, and iShares Dow Jones US Consumer Goods (IYK) was down 1.2%.The State Street Consumer Discretionary Select Sector SPDR (XLY) fell 0.3%. VanEck Retail ETF (RTH) lost 0.8%, and the State Street SPDR S&P Retail (XRT) decreased 0.2%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) fell 1.8%, iShares US Healthcare (IYH) lost 1.7%, and Vanguard Health Care ETF (VHT) was down 1.5%. IShares Biotechnology ETF (IBB) was steady.IndustrialThe State Street Industrial Select Sector SPDR (XLI) decreased 0.2%. Vanguard Industrials Index Fund (VIS) and iShares US Industrials (IYJ) were 0.1% higher.CryptocurrencyIn midday activity, bitcoin (BTC-USD) added 3.8%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) gained 3.9%, ProShares Ether ETF (EETH) rose 5.8%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) was 4.8% higher.

Dow Jones^EEM^EXI^FAS^FAZ^GLD^IBB^IGM^IGV^IPK^IVV^IWMNasdaq Composite^IYE^IYH^IYJ^IYK^IYW^PMR^QQQ^RTH^SOXXS&P 500^SPY^UNG^USO^VDC^VHT^VIS^XLE^XLF^XLI^XLK^XLP^XLV^XRT^XSD$BETH$BITO$EETH