Futures are exhibiting a subdued response as market participants evaluate the implications of potential trade agreements alongside the quarterly earnings reports from prominent corporations. Alphabet’s search and cloud units are driving revenue growth, as the company aims to allocate substantial capital expenditures this year to support its artificial intelligence initiatives. Meanwhile, Tesla’s shares have experienced a decline following disappointing auto sales, which negatively impacted net income for the electric vehicle manufacturer. Data on U.S. business activity is set to be released, coinciding with a new interest rate decision from the European Central Bank.

On Thursday, Dow futures fluctuated near the neutral point, as market participants evaluated a series of corporate earnings and updates indicating advancements in global trade discussions. Dow experienced a decline of 152 points, representing a decrease of 0.3%. Meanwhile, the S&P 500 futures remained unchanged, while the Nasdaq 100 futures saw an increase of 51 points, or 0.2%.

The principal indices on Wall Street experienced a notable increase on Wednesday, with the benchmark S&P 500 achieving its 12th record close of 2025 and the tech-centric Nasdaq Composite surpassing the 21,000 threshold for the first time. Equities experienced an uplift following a report from the Financial Times indicating that the U.S. and European Union were advancing towards a trade agreement, which would establish a baseline tariff of 15% on imports from the bloc. The reports, subsequently validated by Bloomberg News, emerged following President Donald Trump’s announcement of a trade agreement with Japan on Tuesday, which incorporated a 15% tariff on imports into the United States. Experts indicated that the recent developments have alleviated persistent worries regarding the ambiguity surrounding Trump’s tariff policy, particularly as the August 1 deadline for the implementation of his heightened “reciprocal” tariffs approaches. With approximately 25% of firms having reported their latest quarterly earnings, the second-quarter reporting period has demonstrated considerable strength — 67% of these entities have exceeded analysts’ revenue estimates and 88% have outperformed earnings per share projections.

Leading the lineup of results released after market hours on Wednesday were Alphabet and Tesla — the initial representatives of the so-called “Magnificent 7” mega-cap technology firms to disclose their financial performance. In the second quarter, Alphabet experienced a remarkable 14% increase in revenue compared to the previous year, reaching a record high of $96.4 billion, driven primarily by robust performance in its critical search and cloud segments. However, the returns of the Google-parent were moderated by its substantial investments in artificial intelligence, which executives have identified as a vital driver of future growth. Google has been integrating AI into its search operations recently to counter the growing competition from emerging startups such as OpenAI and Perplexity. AI presents a significant opportunity for Alphabet’s advertising division, enabling the company to offer businesses advertising campaigns that can maximize returns. Total advertising revenue reached $71.3 billion for the quarter, reflecting a year-on-year increase of 10.4%, with the core search segment experiencing growth of 11.7%. The cloud division of Google, providing computational resources to data centers, experienced a 32% rise in revenue, reaching $13.6 billion. Nevertheless, similar to many of its technology counterparts, stakeholders are eager to understand the company’s strategy for capitalizing on its substantial investments in artificial intelligence. Alphabet indicated that capital expenditures for the current year are projected to increase by 13%, reaching approximately $85 billion. In 2024, the figure was recorded at $52.5 billion. The stock price of Alphabet increased by over 2% during after-hours trading.

Musk cautions about “rough quarters” on the horizon for Tesla. Automation continues to be a central theme at Tesla, as the electric vehicle leader anticipates that its initiatives in self-driving technology and robotics will generate new revenue streams to counterbalance the declining demand in the automotive sector. Challenges arising from the forthcoming expiration of a federal tax credit aimed at promoting EV sales are also on the horizon. CEO Elon Musk, whose recent political ties with Trump have sparked new controversy for Tesla, informed analysts that the company might experience “a few rough quarters.” “I’m not saying we will, but we could — you know, Q4, Q1, maybe Q2, but once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I’d be surprised if Tesla’s economics are not very compelling,” Musk said. In an interview with the Wall Street Journal, he stated that Tesla is still in the “early stages” of its autonomous driving ambitions. The significant reduction in automotive deliveries has led to a 12% decrease in group-wide revenue, which now stands at $22.5 billion. Net income decreased to $1.17 billion, in contrast to $1.4 billion from the previous year. Tesla’s shares experienced a decline of over 4% in after-hours trading.

In terms of economic indicators, market participants will be closely monitoring the release of flash purchasing managers’ index figures scheduled for Thursday. Analysts project that the preliminary manufacturing PMI reading from S&P Global for July will register at 52.7, reflecting a modest decline from the 52.9 observed in the preceding month. A measure of services activity is projected to increase marginally to 53.0 from 52.9. Values exceeding the 50-point threshold signify expansion. In light of the prevailing uncertainty regarding the direction of Trump’s aggressive tariffs, the U.S. economy has exhibited a wide array of resilience indicators. The equity market has reached unprecedented levels, retail sales have exceeded expectations, consumer confidence has shown signs of recovery, and the anticipated surge in inflation — which was a significant concern following Trump’s announcement of “reciprocal” tariffs in April — has not materialized as of yet. However, it has been noted that the effects of the tariffs may become evident in the forthcoming months.

The European Central Bank is set to announce its forthcoming policy decision on July 24, with market participants largely expecting that it will maintain the current levels of key interest rates. It is the consensus among analysts that the ECB will maintain its key deposit rate at 2%. During the most recent meeting in June, decision-makers, supported by indications of diminishing inflation and lackluster economic performance within the 20-member euro zone, reduced interest rates by 25 basis points. The eighth reduction within a year has occurred, accompanied by a signal from the ECB suggesting a probable pause in July, primarily attributable to the prevailing uncertainty surrounding trade tensions with Washington. “The ECB’s forthcoming actions will be significantly shaped by the evolution of the tariff dispute and its repercussions on growth projections,” analysts at Erste Group stated in a note. On Wednesday, the Financial Times indicated that, in conjunction with a 15% tariff on European imports, a trade agreement between the EU and the U.S. would entail both parties eliminating tariffs on select goods, including spirits, medical devices, and aircraft. However, the EU stands prepared to implement a possible 93 billion euro package of retaliatory duties should an agreement not be achieved by August 1, according to the report.