U.S. stock index futures rose early Wednesday as investors reacted to record-high closes on Wall Street and growing optimism regarding a diplomatic deal to reopen the Strait of Hormuz. However, broader market enthusiasm was tempered by aftermarket declines for SpaceX and Advanced Micro Devices (AMD) following their latest quarterly earnings reports.
Wall Street Records and Geopolitical Hopes
Major indexes surged on Tuesday, with the Dow Jones Industrial Average and S&P 500 both closing at record highs. The Dow jumped 907 points, marking its second record close, while the S&P 500 rose 1.8% to reach its first record high since June.
Market appetite was bolstered by assertions from U.S. officials, including President Donald Trump and Treasury Secretary Scott Bessent, that a deal between the U.S., Oman, and Iran to reopen the Strait of Hormuz was close. Bessent stated the deal could arrive today or tomorrow
. While Iranian media reported potential delays due to continued U.S. threats, the prospect of a deal led crude oil prices to tumble.
Additional support for the rally came from strong earnings reports from Palantir and Caterpillar, as well as previous positive results from AI spenders Microsoft and Amazon. The PHLX Semiconductor index gained more than 6.5%, and the Russell 2000 index of small stocks achieved a new closing high with a 1.85% increase.
SpaceX Reports First Public Earnings
Space Exploration Technologies (SPCX), or SpaceX, released its first-ever quarterly financial report as a publicly traded company shortly after 4 p.m. ET Tuesday. The company reported revenue of $7.8 billion for the April-to-June quarter, a 92% increase from the previous year, surpassing FactSet analyst expectations of just over $6.8 billion.
Despite the revenue beat, SpaceX reported a net loss of $541 million, or 9 cents a share. Market reaction was negative, with shares falling as much as 8% in aftermarket trading. Investors were rattled by the company’s high capital expenditures, which reached $18.4 billion for the quarter, and plans for increased spending on AI infrastructure.
During the earnings call, CEO Elon Musk outlined goals for SpaceX to reach $1 trillion in revenue by 2030 and discussed ramping up AI compute capacity. SpaceX also announced a partnership with Nvidia on AI processors in space. While this tieup caused Nvidia shares to rise about 2% aftermarket, the news put pressure on AMD, as investors viewed it as a missed contract opportunity for the chipmaker.
AMD and Tech Sector Volatility
AMD saw its shares fall as much as 9% in aftermarket trading.
The volatility in AI-linked stocks follows a turbulent July where investors questioned high valuations. However, some analysts suggest the current movement is a momentum unwind rather than a fundamental deterioration of the sector.
Market Outlook and Upcoming Data
Early Wednesday futures remained positive, with the Dow Jones futures rising 0.35% and S&P 500 futures advancing 0.3%. Investors are now shifting focus to several key events and reports:
- SpaceX Lockup: On Thursday, SpaceX will experience its first IPO lockup expiration, allowing insiders—excluding Elon Musk—to sell shares.
SpaceX stock currently remains below its $135 IPO price and its June 16 all-time high of 225.64, according to Investor’s Business Daily. Meanwhile, the 10-year Treasury yield recently dipped to 4.6%.
