FX.co ★ U.S. Stocks May See Early Rally On Upbeat Earnings News

Following a mixed session, stocks are poised for an upward trend in early trading on Wednesday. Major index futures, including those for the S&P 500, are indicating an early rally on Wall Street, with a 1.2 percent increase.

Stocks are anticipated to gain from positive corporate earnings news, particularly from companies like Advanced Micro Devices (AMD). Shares of AMD have surged by 7.9 percent in pre-market trading after the company reported second-quarter results that surpassed analyst expectations on both top and bottom lines.

Similarly, Starbucks (SBUX) is experiencing notable pre-market strength, as the coffee giant's fiscal third-quarter earnings met estimates, and it maintained its full-year guidance. DuPont (DD) shares have also jumped in pre-market trading following better-than-expected second-quarter results from the chemical giant.

Conversely, Microsoft (MSFT) might see a downturn despite reporting quarterly earnings and revenue that exceeded expectations, as its cloud computing results disappointed investors.

The bullish sentiment on Wall Street is further fueled by anticipation of the Federal Reserve's monetary policy announcement this afternoon. While the Fed is expected to keep interest rates unchanged, the accompanying statement could significantly influence market outlook for the next policy decision in September.

Fed officials have indicated the necessity for "greater confidence" in slowing inflation before cutting rates. Recent inflation data has spurred optimism about a potential rate cut in September. According to CME Group's FedWatch Tool, there is an 87.7 percent likelihood of a quarter-point rate cut in September and an 11.9 percent chance of a half-point cut.

Later today, MNI Indicators will release its report on Chicago-area business activity for July. The Chicago business barometer is projected to dip to 44.5 in July from 47.4 in June, with a reading below 50 indicating contraction. Additionally, the National Association of Realtors will release its report on pending home sales for June, which are expected to rise by 1.3 percent after a 2.1 percent decline in May.

Tuesday saw the major U.S. stock indexes move in diverging directions following a choppy, mixed Monday session. The tech-heavy Nasdaq dropped 222.78 points, or 1.3 percent, to 17,147.41, marking its lowest closing level in over a month. The S&P 500 fell by 27.10 points, or 0.5 percent, to 5,436.44, while the Dow rose by 203.40 points, or 0.5 percent, to 40,743.33.

In international markets, stocks in the Asia-Pacific region saw substantial gains on Wednesday. Japan's Nikkei 225 Index rose by 1.5 percent, and China's Shanghai Composite Index increased by 2.1 percent. European markets also moved higher, with Germany's DAX Index climbing by 0.6 percent, and both the U.K.'s FTSE 100 Index and France's CAC 40 Index up by 1.2 percent.

In commodities trading, crude oil futures have spiked $2.52 to $77.25 a barrel after a drop of $1.08 to $74.73 a barrel on Tuesday. Gold, trading at $2,466.20 an ounce, is up $14.30 from the previous session's close of $2,451.90. Gold had surged $26.40 on Tuesday.

On the currency front, the U.S. dollar is trading at 150.14 yen, down from 152.77 yen at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0837, compared to $1.0815 the previous day.