Tech Stocks Rise After Strong Microsoft and Meta Earnings; U.S. Reaches Trade Deal With South Korea

U.S. stock futures advanced Wednesday evening following strong quarterly results from Microsoft and Meta Platforms. S&P 500 futures rose 0.7% and Nasdaq 100 futures gained 1%, while Dow Jones Industrial Average futures increased by 89 points, or 0.2%.

Microsoft shares climbed about 8% and Meta rose roughly 11% in after-hours trading. Microsoft reported that annual revenue from its Azure cloud computing service surpassed $75 billion. Meta issued a positive third-quarter sales outlook, exceeding analyst expectations.

President Donald Trump announced that the United States had reached a trade agreement with South Korea, setting tariffs at 15%, which is lower than the previously threatened 25%. The announcement comes ahead of a major tariff deadline on Friday.

Earlier in the day, the S&P 500 closed down 0.12% and the Dow Jones Industrial Average fell 0.38%, while the Nasdaq Composite edged up 0.15%. The declines followed comments from Federal Reserve Chair Jerome Powell, who indicated the central bank is not yet prepared to cut interest rates. The Fed left its benchmark policy rate unchanged at its July meeting, though governors Michelle Bowman and Christopher Waller dissented from the decision. Powell stated that the Fed has "made no decisions" regarding policy changes for September.

Ross Mayfield, investment analyst at Baird, said the day's market losses were expected given recent high valuations, noting that "there's a lot of good news priced in" and that the market may need to consolidate after a strong run.

Investors are awaiting Thursday's release of the personal consumption expenditures price index, the Federal Reserve's preferred inflation measure, as well as weekly jobless claims data. Several major companies, including Comcast, Bristol-Myers Squibb, Cigna, CVS Health, Shake Shack, AbbVie, and Mastercard, are scheduled to report earnings before the market opens, with Apple and Amazon results expected later in the day.