U.S.-Indonesia trade deal; ASML reports; earnings ahead - what’s moving markets

Investing.com - U.S. stock futures inch down, with markets digesting the implications of mixed consumer price data and gearing up for even more inflation figures. A host of U.S. companies are expected to release their latest quarterly reports, while chip gear supplier ASML (AS:ASML) in Europe warns that it cannot confirm it will grow in 2026, partly because of possible headwinds from heightened U.S. tariffs. On the trade front, President Donald Trump unveils a new deal with Indonesia, as the August 1 deadline for his elevated "reciprocal" levies to take effect looms large.

1. Futures lower

U.S. stock futures ticked lower on Wednesday as investors looked ahead to a fresh raft of corporate earnings and a key gauge of wholesale producer price growth.

By 03:37 ET (07:37 GMT), the Dow futures contract had fallen by 91 points, or 0.2%, S&P 500 futures had declined by 15 points, or 0.2%, and Nasdaq 100 futures had dropped by 75 points, or 0.3%.

The 30-stock Dow Jones Industrial Average and benchmark S&P 500 dipped in the prior session, with markets eyeing June inflation which, while broadly in line with expectations, showed acceleration in the cost of several products exposed to tariff pressures.

Bets that the Federal Reserve will choose not to draw down interest rates at its upcoming meeting this month have now been all but cemented in the wake of the numbers, potentially setting the stage for a ratcheting up in tensions between Trump and Fed Chair Jerome Powell. Trump has hinted at the possibility of firing Powell, who has drawn his ire for not heeding Trump’s calls for the Fed to quickly cut rates.

Meanwhile, earnings from major banks -- typically the unofficial kick-off to the quarterly reporting season -- largely topped estimates, but still received a mixed response. JPMorgan shares edged down slightly and Citigroup (NYSE:C) rose by 3.7%, while Wells Fargo (NYSE:WFC) ended lower by 5.5% after it slashed its full-year net interest income outlook.

2. U.S.-Indonesia trade deal announcement

Trump announced on Tuesday that the U.S. would begin placing a 19% tariff on goods from Indonesia as part of a trade deal with the Southeast Asian nation.

Indonesia currently faces a flat tariff rate of 10%, and has not placed levies on U.S. exports coming into the country. The deal also includes a penalty rate for routing goods from China to the U.S. through Indonesia, a practice known as "transshipping."

The pact comes after the White House revealed preliminary or framework agreements with the United Kingdom (TADAWUL:4280), China, and Vietnam.

Trump has said more deals are on the way, with the clock ticking down closer to an impending August 1 deadline for his so-called "reciprocal" levies to snap into effect. The White House has said the deadline will not be moved, after it was previously delayed following deep market ructions when Trump first unveiled the duties in April.

Recent estimates from Yale Budget Lab have said that, based on Trump’s tariff announcements as of Sunday, the effective average duty rate will rise to 20.6% -- up from 2% to 3% prior to his return to power in January.

3. ASML reports

ASML has warned that it may not achieve growth in 2026, even though the Dutch semiconductor equipment supplier reported second-quarter bookings that topped estimates.

In an interview posted on the company’s website, CEO Christophe Fouquet flagged challenges presented by “macroeconomic and geopolitical” forces, particularly tariffs.

“While we still prepare for growth in 2026, we cannot confirm it at this stage,” Fouquet said.

The update was not as reassuring as many analysts had hoped and underlined the murky operating environment facing companies around the world in the early stages of the final six months of 2025. Shares in ASML sank by more than 6% in early European trading.

Yet not all was gloomy on the earnings front. Cartier-owner Richemont (SIX:CFR) posted a 6% jump in sales for the quarter ended in June to 5.4 billion euros, roughly meeting expectations, thanks in part to strong jewellery demand that helped offset weakness at its watches unit.

4. U.S. earnings ahead

A bevy of U.S. companies are slated to report on Wednesday, as the nascent quarterly earnings season grinds into a higher gear.

On the docket are major lenders like Bank of America, Morgan Stanley (NYSE:MS), and Goldman Sachs, which may offer more insight into how the financial sector expects the outlook to evolve in the coming months.

An initial glimpse into the state of the pharmaceutical industry could also come from Johnson & Johnson (NYSE:JNJ).

After the closing bell, United Airlines is due to post returns. Rival Delta Air Lines (NYSE:DAL) reinstated its once-scrapped guidance last week, citing hopes for stabilizing demand in the second half, as well as reduced industry capacity, which could bolster revenue per available seat miles.

5. U.S. PPI, Beige Book due out

Investors will have the chance to parse through another key inflation reading on Wednesday, this time in form of the producer price index from June.

Economists estimate that headline PPI will come in at 2.5% in the twelve months to June, edging down slightly from 2.6% in May. Month-on-month, it is seen rising 0.2%, marginally faster than the previous pace of 0.1%.

The Fed’s Beige Book is also dut to be published. The report, which is released eight times a year, brings together anecdotal information on current economic conditions, including interviews with businesses, economists, market experts and other sources.

"The Beige Book has taken on added importance in the present environment given all the moving pieces influencing economic data, and it’s likely to reflect continued stagflationary forces in the domestic economic (with growth headwinds and upward pressure on prices from trade friction)," analysts at Vital Knowledge said in a note to clients.