U.S. stock futures and major indexes advanced on Wednesday after a blockbuster takeover approach for PayPal and a second consecutive soft inflation reading reinforced expectations that the Federal Reserve may pause its rate-hiking cycle.
The PayPal buyout proposal dominated premarket trading. Stripe and Advent International reportedly offered $60.50 per share, valuing the payments giant at more than $53 billion — a roughly 28% premium to Tuesday’s close. PayPal shares surged as much as 18.5% in premarket and remained up nearly 15% after the open, though the company has not yet engaged with the offer.
Inflation data provided a tailwind for equities. The Producer Price Index (PPI) unexpectedly fell 0.3% in June, compared with expectations for no change. This followed Tuesday’s softer-than-expected Consumer Price Index report, which had already slashed the probability of a July rate hike from over 40% to approximately 16–17%, according to CME’s FedWatch Tool. Fed Chair Kevin Warsh, in his second day of Congressional testimony, maintained a cautious tone, stating more evidence was needed to confirm sustained disinflation.
Corporate earnings added to the positive sentiment. BlackRock reported a 20% jump in second-quarter profit to $1.91 billion amid rising markets that pushed assets under management to $15.34 trillion; its shares gained over 7%. Morgan Stanley also beat profit estimates, driven by stronger M&A activity. In the semiconductor space, ASML lifted its 2026 sales outlook to €43–€45 billion on robust AI-related demand, though chip stocks later turned mixed as geopolitical concerns over U.S. strikes against Iran kept oil prices elevated — WTI traded above $79/bbl and Brent above $85/bbl.
The S&P 500, sitting less than 1% below its June record, rose 0.47%, while the Nasdaq Composite climbed 0.67%. The Dow added about 148 points. Despite the gains, market strategists warned that with the S&P already up over 10% year-to-date, the bar for future earnings delivery remains high.
