Futures Point Upward After Previous Session’s Losses

Wall Street investors are anticipating a brighter start to trading Wednesday, with stock futures indicating positive movement. This follows a challenging session that saw major indices end in the red, as market participants digest a new wave of corporate financial reports.

Corporate Giants Show Divergent Fortunes

Futures contracts for the S&P 500 showed a modest gain of 0.1%, while the Dow Jones Industrial Average futures climbed 118 points, a 0.3% increase. The Nasdaq 100 futures also nudged higher by approximately 0.1%.

Among the early standout performers, McDonald’s shares surged 3%. The fast-food giant’s second-quarter earnings surpassed analyst expectations on both revenue and profit, further bolstered by same-store sales growth that represented the chain’s strongest performance in nearly two years.

Arista Networks also experienced a significant boost, with its stock rallying 11% following the release of a report that exceeded projections.

Conversely, Snap’s stock plummeted 18% after its quarterly revenue fell slightly short of anticipated figures. Advanced Micro Devices (AMD) also saw its shares drop around 6% after its adjusted earnings per share missed analyst consensus.

Previous Day Recap: Tech Stocks Dragged Down Indices

These pre-market movements come after a difficult trading day Tuesday. The S&P 500 concluded its session lower, marking its fifth down day in the past six. Similarly, the Dow Jones Industrial Average recorded its sixth consecutive negative session.

Technology stocks were particularly weak, contributing to a nearly 0.7% decline in the Nasdaq Composite. However, smaller capitalization stocks managed to outperform, with the Russell 2000 index posting a 0.6% gain.

“We just need some digestion,” said Keith Lerner, co-chief investment officer at Truist Wealth. “Markets don’t move in a straight line. … But, overall, I still think the underlying trend is positive.”

Analysts suggest the market is in a period of adjustment. For instance, the S&P 500 has seen a notable increase in volatility, with the VIX index, a key measure of expected volatility, averaging 17.5 in the past month, compared to an average of 13.2 in the preceding month, according to Cboe Global Markets data (Cboe 2025).

Traders at work on the New York Stock Exchange floor during afternoon trading on August 1, 2025.

Markets Waver as Tariffs Loom, Economic Data Dims Outlook

S&P 500 Retreats Amid Stagflation Fears and Trade Tensions

Equities faced downward pressure Tuesday as investors grappled with discouraging economic indicators and renewed threats of tariffs, heightening anxieties about the health of the U.S. economy.

Economic Headwinds Bite

The S&P 500 index slipped 0.4%, while the Nasdaq Composite saw a 0.5% decline. The Dow Jones Industrial Average remained relatively unchanged. This pullback follows a volatile week, which saw the Dow experience a significant drop on Friday after a weaker-than-anticipated jobs report suggested a cooling labor market. The index had, however, recouped those losses with a substantial surge on Monday.

Adding to market concerns, the ISM Services index reported flatlining activity in July. This development amplified worries of stagflation—a scenario characterized by stagnant economic growth alongside high inflation and unemployment. As services constitute roughly 70% of the U.S. economy, a deceleration in this sector signals potential future challenges.

S&P 500, 1-day

Tariff Threats Re-emerge

Market sentiment was further dampened by comments from President Donald Trump to CNBC, indicating impending tariffs on semiconductor chips and pharmaceuticals. “We’re going to be announcing on semiconductors and chips, which is a separate category, because we want them made in the United States,” Trump stated, promising a new plan “within the next week or so.” This signals a potential escalation in trade policy.

Company-Specific Moves

Defense technology firm Palantir emerged as a standout performer, with its shares climbing 7% after announcing its revenue had surpassed $1 billion for the first time. In contrast, industrial giant Caterpillar experienced an earnings miss, leading to an initial dip in its stock, though it later traded marginally higher. Eaton’s shares fell 6% following what was described as disappointing financial guidance.

“Today we’re seeing the market pull back a little bit, [but] equities have been on a nice run. We’re probably due for a period of consolidation, some backing and filling, so to speak. Clearly, valuations are elevated. This is not a cheap market.”

—Terry Sandven, Chief Equity Strategist at U.S. Bank Asset Management

Despite current market volatility, Terry Sandven of U.S. Bank Asset Management noted that favorable conditions persist. He highlighted benign inflation, the prospect of lower interest rates, and rising corporate earnings as supportive factors for a “risk-on bias.”

The S&P 500 currently trades at a forward price-to-earnings ratio of approximately 20.5, which is above its 5-year historical average of around 18.2, suggesting elevated valuations in the broader market (FactSet, August 2025).

Traders operate on the floor of the New York Stock Exchange during trading on August 5, 2025, in New York City.

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