Dow Jones futures rise ahead of upcoming corporate earnings reports

• Dow Jones futures rose as growing expectations of a Fed rate cut in September boosted market sentiment.

• Traders await upcoming earnings reports from Uber, McDonald’s, Disney, Airbnb, DoorDash, and others.

• Market sentiment may turn cautious as investors await President Trump’s upcoming trade deadline on Friday.

Dow Jones futures surge during early European hours, ahead of the market opening in the United States (US) on Wednesday, trading around 44,450, up by 0.51%. Meanwhile, S&P 500 futures advance by 0.47% to 6,350, and Nasdaq 100 futures appreciate 0.34% to trade above 23,200.

US stock futures climb on boosted market sentiment amid rising bets on an interest rate cut by the US Federal Reserve (Fed) in September. Markets continued to reflect over a 90% probability of a Fed rate cut in September, with roughly 60 basis points of total easing expected by year-end.

In futures trading, Arista Networks jumped over 14% after posting strong quarterly results. However, AMD fell more than 5% after missing estimates, driven by US export restrictions to China, while Snap, the social media platform, sank 14% after falling short of second-quarter revenue expectations.

Market focus now shifts to upcoming earnings reports from Uber, McDonald’s, Disney, Airbnb, and DoorDash, among others. Additionally, investors will be watching for remarks from several Federal Reserve policymakers later in the day, including Susan Collins, Lisa Cook, and Mary Daly.

Futures linked to the broad market index may struggle as stagflation fears resurfaced after the Institute for Supply Management (ISM) Services PMI declined to 50.1 in July. The reading came down from 50.8 in the previous month and fell short of the expected reading of 51.5. Meanwhile, the Services Employment Index ticked lower to 46.4 from 47.2, and the Services New Orders Index deflated to 50.3 from 51.3.

Additionally, traders may look for safe-haven assets amid renewed trade tensions, driven by a new threat from US President Donald Trump, citing to imposition of tariffs of up to 250% on pharmaceutical imports, and potential levies on semiconductors. Moreover, risk sentiment could increase ahead of Trump's latest trade deadline on Friday, when a fresh round of high tariffs will go into effect on multiple nations unless last-minute deals are reached to negotiate lower levies.