U.S. stock futures climbed modestly on Wednesday as investors prepared for a key sequence of events, including the Federal Reserve’s interest rate decision, upcoming economic reports, and earnings from some of the largest tech companies. While the Fed is expected to maintain current rates despite mounting pressure from President Donald Trump to lower borrowing costs rapidly, all eyes are on earnings from Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT), with particular attention on their artificial intelligence strategies.
Futures inch higher
Early Wednesday trading saw Dow futures mostly flat, the S&P 500 futures up by 0.1%, and Nasdaq 100 futures rising around 0.2%. This follows a dip on Tuesday when the S&P 500 and Nasdaq Composite pulled back from recent record levels.
Several Dow stocks—including pharmaceutical giant Merck (NYSE:MRK), health insurer UnitedHealth (NYSE:UNH), and aerospace leader Boeing (NYSE:BA)—suffered losses after releasing quarterly earnings. United Parcel Service (NYSE:UPS) plunged over 10%, as the package delivery company once again declined to provide annual revenue and margin guidance, stoking fears about the impact of unpredictable U.S. trade policies.
Consumer goods firm Procter & Gamble (NYSE:PG) also fell after issuing weaker-than-expected annual forecasts and signaling upcoming price hikes on some products to offset tariff-related costs. Appliance manufacturer Whirlpool (NYSE:WHR) cut its full-year outlook, with shares falling more than 13%, citing tariffs as a significant factor.
Limited progress in U.S.-China trade talks
Recent trade negotiations in Sweden between the U.S. and China wrapped up without a major breakthrough after two days of discussions. However, both sides described the talks as constructive, aimed at extending the current 90-day trade truce.
U.S. Treasury Secretary Scott Bessent remarked, “It’s just that we haven’t given the signoff.” U.S. officials indicated that the decision to extend the truce—set to expire August 12—ultimately lies with President Trump. If no extension occurs, tariffs on Chinese goods could surge back to triple-digit percentages.
Trade negotiations remain a priority for the Trump administration. This week followed the announcement of a framework agreement with the European Union, though Trump stated on Tuesday that talks with India remain unresolved after reports India plans to accept tariffs between 20% and 25% on exports to the U.S.
Despite some progress, many trade deals are still pending, with the August 1 deadline for Trump’s increased “reciprocal” tariffs rapidly approaching.
Fed decision looms
Focus is shifting to the Federal Reserve’s expected decision to keep interest rates steady at the end of its two-day meeting Wednesday. Several Fed officials have advocated for a cautious approach, wanting to better understand how tariffs will affect the broader economy.
Concerns persist that tariffs could increase inflation and restrain growth. Though price gains have been modest and the economy resilient so far, there is growing concern that companies may pass rising costs to consumers.
The Fed has maintained rates between 4.25% and 4.5%, a stance supported by Chair Jerome Powell but criticized by President Trump, who has called for quicker rate cuts to spur growth.
Upcoming economic data
Markets await a series of economic releases providing insight into U.S. economic health. Wednesday’s highlight is the first estimate of second-quarter GDP, expected to show 2.5% growth following a 0.5% contraction in Q1.
July’s private payrolls are forecasted to rise by 77,000, bouncing back from a 33,000 decline in June. This ADP report will set the stage for Friday’s critical nonfarm payrolls figure.
While consumer confidence improved recently, data also showed a decrease in job openings and hiring, indicating some cooling in the labor market.
Microsoft and Meta earnings spotlight
Wednesday will feature earnings reports from two tech heavyweights in the “Magnificent Seven” group.
Microsoft’s AI ambitions will be closely analyzed, especially as OpenAI, its partner, has started using cloud services from competitors including Google (NASDAQ:GOOGL), CoreWeave (NASDAQ:CRWV), and Oracle (NYSE:ORCL). OpenAI’s success has fueled Microsoft’s Azure cloud growth, positioning the company as a key beneficiary of the AI surge.
Meta Platforms will also be under scrutiny, with CEO Mark Zuckerberg focusing heavily on AI, planning roughly $55 billion in AI data center investments over the last three quarters of 2025. Investors are watching closely to see how Meta plans to monetize these AI ventures.
Other companies releasing earnings after the bell include chip designer Arm Holdings (NASDAQ:ARM) and trading platform Robinhood Markets (NASDAQ:HOOD).
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