Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - U.S. stock futures climb on Wednesday, suggesting more gains ahead for Wall Street after tepid inflation data drove the S&P 500 and Nasdaq Composite to all-time closing peaks. Cisco Systems (NASDAQ:CSCO) is due to report, with analysts keeping their eyes peeled for the network equipment provider’s outlook for its 2026 fiscal year. Elsewhere, Perplexity AI offers $34.5 billion to buy Google’s Chrome browser.
1. Futures rise
Futures contracts linked to the largest U.S. indices rose, pointing to an extension in gains logged in the prior session that were fueled by muted inflation figures.
By 03:36 ET (07:36 GMT), the S&P 500 futures contract had advanced by 33 points, or 0.5%, and Nasdaq 100 futures had climbed by 264 points, or 1.1%, and Dow futures had gained 49 points, or 0.1%.
All three of the major averages on Wall Street rallied by more than 1% on Tuesday, spurred on by data showing that headline year-over-year consumer price growth in July matched the preceding month. The numbers bolstered wagers that the Federal Reserve will cut interest rates at its upcoming meeting next month, with officials at the central bank seen opting to prioritize supporting a flagging labor market over still above-target price gains.
"Inflation was broadly in line with expectations as tariffs continue to be largely absorbed within U.S. corporate profit margins. This gives the Fed the room to respond to the weaker jobs backdrop," analysts at ING said in a note.
Both the benchmark S&P 500 and tech-heavy Nasdaq notched fresh record closing highs, while yields on short-dated U.S. Treasuries -- which are particularly sensitive to rate expectations -- dipped. Yields tend to move inversely to prices.
2. Cisco to report
On the earnings calendar, Cisco Systems is set to kick off a string of releases from companies whose reporting quarter finished at the end of July.
The results, due out after the closing bell, are anticipated to beat expectations thanks partially to "general strength" in Cisco’s firewalls business and cybersecurity subscribers, according to analysts at Piper Sandler.
"Cisco is still experiencing net-momentum into the second half, with early networking prints a good signal for the space and 2026 likely a good refresh period," the analysts led by James Fish wrote.
They added that Cisco’s fiscal year 2026 guidance will be "key," particularly after Mark Patterson replaced Scott Herren as the firm’s finance chief. Herren, who retired in July, is leaving after Cisco raised its fiscal 2025 results outlook, banking on artificial intelligence helping to sustain demand from cloud customers for its networking equipment.
Observers also noted that the contribution of Splunk (NASDAQ:SPLK), the cybersecurity group Cisco bought for $28 billion in 2024, will now be folded into the company’s organic numbers. The transaction was the largest in Cisco’s history and reflected a push to more deeply integrate AI into its operations.
3. Perplexity’s $34.5 bn bid for Google’s Chrome
Perplexity AI has put forward a $34.5 billion unsolicited all-cash offer to buy Alphabet-owned Google’s Chrome brower, marking a push by the startup to harness the data needed to train its AI model from the service’s billions of users.
The news comes as Google faces a legal battle over antitrust concerns surrounding its all-important search business.
Last year, a U.S. judge ruled that Google had spent billion of dollars to illegally create a monopoly that made it the world’s dominant search engine. The decision cleared the way for a number of potential fixes, including the breaking up of Alphabet (NASDAQ:GOOGL) through a sale of Chrome. Such a move could fundamentally alter the world of online advertising that has long been a centerpiece of Google’s operations.
Perplexity, which previously submitted a bid for TikTok US as the short-form video app dealt with concerns in Washington around its Chinese ownership, did not disclose how it plans to fund its bid. The firm was last valued at $14 billion, and has raised roughly $1 billion in backing from investors like SoftBank (TYO:9984) and Nvidia (NASDAQ:NVDA).
4. Ether near all-time peak
Bitcoin gained slightly, while Ether hovered around record highs as cryptocurrency markets rallied on the mild U.S. consumer inflation data.
Ether also surged amid a flurry of buying as corporate entities stockpile the world no. 2 cryptocurrency in a manner similar to Bitcoin. The digital token rose as much as 8.5% to $4,683.0, coming within touching distance of a $4,861 record high hit in November 2021.
Several U.S.-listed companies outlined plans to increase their Ether holdings this week amid growing adoption of a Bitcoin buying strategy popularized by Michael Saylor’s Strategy.
The world’s biggest corporate Bitcoin holder, Strategy has raised billions of dollars through share issuances, which it has then largely used to fund Bitcoin purchases over the last two years.
5. Gold inches higher
Gold prices pushed up in early European trading, supported by hopes for Fed policy easing, while investors also looked ahead to U.S.-Russia talks due later this week.
Spot gold had risen by 0.3% to $3,359.54 an ounce, while gold futures for December climbed by 0.3% to $3,408.22/oz by 03:35 ET.
Following Tuesday’s muted inflation figures, markets are now pricing in a more than 96% probability of a September cut, according to CME’s FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, making bullion more attractive to investors.
However, gold’s advance was tempered by geopolitical developments, with traders closely watching Friday’s summit between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska.
The meeting will focus on the war in Ukraine, and market participants are weighing the possibility of proposals for a ceasefire.