S&P 500, Dow Futures Edge Higher as Mideast Hopes Offset SpaceX, AMD Drag

Wall Street's main index futures edged higher on Wednesday, with hopes surrounding Middle East tensions offsetting a drag from sharp premarket declines in SpaceX and Advanced Micro Devices (AMD).

At 6.54am, Dow E-minis were up 202 points, or 0.37%, S&P 500 E-minis were up 31.5 points, or 0.41%, while Nasdaq 100 E-minis were down 4.25 points, or 0.01%.

Elon Musk-led SpaceX said revenue nearly doubled and operating losses narrowed in its first earnings report since going public, fuelled by its booming Starlink satellite communications and artificial intelligence (AI) businesses.

However, the rocket company's shares slid 11.7% in premarket trading after executives flagged that the spending spree underpinning its lofty ambitions was far from over. The shares could face additional pressure from the expiry of the stock's post-IPO lock-up period starting on Thursday. Musk's other company, Tesla, slipped 1%.

"This is the culmination of the story of this entire earnings season. SpaceX beat analysts' expectations on revenue, but spending on AI is getting out of hand, with no signs of slowing down anytime soon," said Nic Puckrin, cross-asset analyst and founder of Coin Bureau.

AMD forecast quarterly revenue above estimates, reflecting strong AI demand, but its shares slipped 9.2% — suggesting investors wanted a stronger outlook to justify the stock's 142% jump this year.

Rival Nvidia rose 2%, also underpinned by SpaceX's plans to use its hardware exclusively to build its data centres. Intel and Micron each lost more than 2%, while megacaps Microsoft and Alphabet were steady as Wall Street took a breather from a rally that had taken the S&P 500 and the Dow to record highs.

Elsewhere, Eli Lilly rose 4.2% after raising its full-year revenue forecast, Disney gained 4.5% after beating third-quarter profit expectations, and Arista Networks jumped 13.3% on an above-estimate third-quarter revenue forecast.

Investors are also awaiting a private national employment survey at 8.15am and services sector data at 10am, ahead of Friday's official non-farm payrolls figures.

Kansas City Fed president Jeff Schmid, a non-voting FOMC member, said late on Tuesday that some monetary policy tightening is needed to bring "too high" inflation back to the 2% target. Remarks from governor Lisa Cook and San Francisco Fed president Mary Daly are also in focus. Traders are pricing in a 58.4% chance of a September rate hike, the CME Group's FedWatch Tool showed.