Yesterday's statistics played into the hands of the central bank, which reiterated that it needs more time to commit, more evidence and more data to venture further in their policy easing.

Powell spoke after data showed the latest job openings and labor turnover summary (JOLTS) report showed that job openings unexpectedly rose in May, an indication that wages still have some room to grow. However, he gave investors some hope when he confirmed that the US is back on a disinflationary path.

The US economy is robust, so it is allowing the Fed the luxury of waiting for its first rate cut. The financial community is still counting on a first rate cut at the September meeting, with a probability of around 70%.

Ten-year yields have eased to 4.40%, after reaching almost 4.5% on Monday due to fears that Donald Trump was closer than ever to become the next President after Joe Biden’s poor performance during Thursday’s debate.

Against this backdrop, today's session brought more economic data to help investors refine their scenarios. US jobless claims came in at 238,000 in the June 29 week, while 235,000 was expected in a Bloomberg consensus. Meanwhile, the ADP report showed private employment rose 150,000 in June, which is lower than the 165,000 expected by economists.

Today, we also have the final versions of services PMIs across the main economic zones, shedding light on the health of services. Finally, the publication of the minutes of the Fed's latest meeting will take center stage in the afternoon, adding another layer of monetary policy to your day if you haven't overdosed.

Tech stocks are still the engine of growth on the stock market, helping to keep US indices on an upward slope. Tuesday saw a 0.6% rise in the S&P500, closing above 5,500 points for the first time, while the Nasdaq100 jumped 1% to also hit a new record. Tesla helped quite a bit, surging 10% to its highest level since January after it posted a smaller-than-expected 5% drop in vehicle deliveries in the second quarter.

In Europe, things went differently. The Paris Bourse was down 0.30%, Frankfurt lost 0.75% and London shed 0.56%. June's inflation in the eurozone fell back slightly (to 2.5% annualized, from 2.6% last month), but the market focused on its underlying component, which remains persistent at 2.9%. Add to this a European unemployment rate hovering around at 6.4%, and you understand why ECB head Christine Lagarde said yesterday take the institution will take its time when it comes to cutting its key rates.

Over in Asia, the indices for mainland China are once again looking bleak. Overnight, growth in China's services sector slowed to an 8-month low, according to the Caixin PMI. The CSI300 is slightly down, but that hasn't stopped the Hang Seng from gaining 1.1%. Elsewhere in the region, Japan and Taiwan were up, boosted by Wall Street's momentum. The Nikkei continued its upward trend, gaining around 1.2%. Australia and India also advanced by 0.2% and 0.7% respectively. South Korea rebounded. European indexes are bullish, while futures on Wall Street are hovering around zero.

Today’s economic highlights:

The final services PMI reading for June will be published throughout the day, in the morning in the US and Europe. Eurozone producer prices are also on the agenda, as well as the US ADP employment survey, jobless claims, factory orders and oil inventories. Christine Lagarde will also give a speech. The full agenda is here. 

The dollar is down to EUR 0.9281 and GBP 0.7863. The ounce of gold edged up to USD 2,349. Oil stabilizes, with North Sea Brent at USD 86.48 a barrel and US light crude WTI at USD 82.71. The yield on 10-year US debt stands at 4.40%. Bitcoin loses ground to USD 60,100.

In corporate news:

  • Tesla, which gained 10.2% on Tuesday, gained a further 3.7% in pre-market trading on Wednesday, still buoyed by its better-than-expected second-quarter vehicle deliveries. Wedbush Securities raised its price target for the automaker from $275 to $300, an expected increase of 30%. Canaccord Genuity, for its part, raised its price target from $222 to $254.
  • Paramount Global - National Amusements, owned by Shari Redstone, has reached a preliminary agreement to sell its majority stake in Paramount to Skydance Media, owned by David Ellison, three sources familiar with the matter told Reuters on Tuesday. Paramount shares jumped 6.5% in pre-market trading.
  • Rivian denied press reports on Tuesday that the American electric vehicle manufacturer was in talks with Volkswagen to extend their partnership beyond the recently announced software joint venture. Rivian shares shed 1.5% in after-hours trading.
  • Apple will have an observer role on the board of OpenAI, the creator of ChatGPT, as part of the artificial intelligence (AI) partnership between the two groups announced last month, Bloomberg reported Tuesday. Phil Schiller, head of the App Store and former Apple marketing chief, has been chosen for the position, Bloomberg said.
  • Southwest Airlines announced Wednesday that it had adopted a "poison pill" mechanism, a protection clause, due to pressure from activist investor Elliott Investment Management for changes at the airline.
  • Alaska Airlines - The airline's flight attendants will receive an average 32% pay rise under a new three-year tentative agreement, the Associate of Flight Attendants union announced.
  • Chicken Soup for the Soul Entertainment - The group's former CEO, William Rouhana, refused to testify Tuesday at a U.S. court hearing as the company faces charges that it failed to pay its employees before filing for bankruptcy.
  • New York Community Bancorp announced on Tuesday that the consolidation of its shares would take effect after the close of trading on July 11.

Analyst recommendations:

  • Affirm Holdings, Inc.: Baptista Research upgrades to buy from outperform with a price target raised from USD 39.60 to USD 40.60.
  • Alphabet Inc.: DZ Bank AG Research drops coverage on the stock.
  • Axalta Coating Systems Ltd.: Baptista Research upgrades to outperform from hold with a price target raised from USD 37.10 to USD 39.60.
  • Charter Communications, Inc.: Citi downgrades to sell from neutral with a price target reduced from USD 280 to USD 255.
  • Newell Brands Inc.: Baptista Research downgrades to outperform from hold with a price target reduced from USD 8.20 to USD 7.90.
  • Nike, Inc.: Zacks downgrades to underperform from neutral with a price target reduced from USD 100 to USD 65.
  • Nvidia Corporation: SPDB International Holdings Ltd initiates a Buy recommendation with a target price of USD 147.60.
  • Tesla, Inc.: Punto Research downgrades to hold from buy with a target price of USD 192.88.
  • Paycom Software, Inc.: Zacks upgrades to outperform from neutral with a target price raised from USD 153 to USD 164.
  • Mgm Resorts International: BTIG initiates a Buy recommendation with a target price of USD 52.
  • Natera, Inc.: Baptista Research maintains its hold recommendation with a price target raised from USD 99 to USD 123.80.
  • Tesla, Inc.: Mirae Asset Securities maintains its buy recommendation and raises the target price from USD 225 to USD 307.
  • Starbucks Corporation: Zacks upgrades to neutral from underperform with a price target raised from USD 70 to USD 82.
  • Alnylam Pharmaceuticals, Inc.: JP Morgan maintains its neutral recommendation and raises the target price from USD 160 to USD 248.
  • Dutch Bros Inc.: Baird maintains a neutral recommendation with a price target raised from USD 33 to USD 42.
  • Qualcomm, Inc.: SPDB International Holdings Ltd initiates a Buy recommendation with a target price of USD 240.70.
  • Walmart Inc.: Zacks upgrades to outperform from neutral with a price target raised from USD 71 to USD 78.
  • Universal Display Corporation: Oppenheimer maintains its outperform rating and raises the target price from USD 200 to USD 250.
  • 3I Group Plc: Morgan Stanley downgrades to equal weight from overweight with a target price reduced from GBX 3246 to GBX 3192.
  • Diageo Plc: Citi upgrades to buy from neutral with a price target raised from GBP 28.25 to GBP 30.
  • JD Sports Fashion: Barclays downgrades to underweight from equal weight with a price target reduced from GBP 1.40 to GBP 1.10.
  • Wizz Air Holdings Plc: AlphaValue/Baader Europe upgrades to add from reduce with a price target reduced from GBP 24.85 to GBP 24.16.