Wall St Eyes Bounce Back Ahead Of Services Activity Data

U.S. stock indexes were set for higher open on Wednesday after two days of declines as focus shifted to services activity data due later in the session for more clues on the health of the economy, while PayPal soared on raising its forecast.

The Institute of Supply Management's data, due at 10 a.m. ET, is expected to show its index for non-manufacturing activity slipped to 53.5 last month from 55.3 in June, the fourth straight monthly decline.

"What we want is Goldilocks number, big numbers right now are bad, whether they're big and good, or big and bad. What we actually want is pretty small increases or small decreases," said Jason Blackwell, chief investment strategist at The Colony Group.

"That tells us that the Fed is working, (but) not too hard (to) take us into a deeper recession."

The Federal Reserve has raised rates by 2.25 percentage points this year and has vowed to be data-driven in its approach toward future hikes.

Meanwhile, St. Louis Federal Reserve President James Bullard said on Wednesday the U.S. central bank will be steadfast in raising interest rates to bring inflation running at four-decade highs back to its 2% target.

Wall Street started August on a sour note after data on Monday showed factory activity across the United States, China and Eurozone weakened in July, with House of Representatives Speaker Nancy Pelosi's visit to Taiwan sparking concerns about escalating tensions between the United States and China.

Pelosi left Taiwan on Wednesday after pledging solidarity and hailing its democracy, leaving a trail of Chinese anger over her brief visit.

Global financial markets have been roiled this year by the Ukraine war, soaring inflation and tightening financial conditions.

Still, a largely upbeat second-quarter earnings season has helped markets bounce back recently. The benchmark S&P 500 index and tech-heavy Nasdaq are up 12.4% and 16.9%, respectively, from lows hit in mid-June.

At 8:37 a.m. ET, Dow e-minis were up 168 points, or 0.52%, S&P 500 e-minis were up 23.75 points, or 0.58%, and Nasdaq 100 e-minis were up 78.5 points, or 0.61%.

PayPal Holdings climbed 13.6% in premarket trading after it raised its annual profit guidance and said activist investor Elliott Management has an over $2 billion stake in the fintech company.

CVS Health Corp rose 4.1% as the largest U.S. pharmacy chain raised its annual profit forecast after strength in its insurance business and sales of COVID-19 over-the-counter test kits helped it beat estimates for quarterly results.

Starbucks Corp gained 1.7% after the coffee chain posted upbeat quarterly profit aided by higher prices and strong demand for its coffees in the United States.

Advanced Micro Devices Inc slid 4.5% after the chip designer forecast third-quarter revenue slightly below Wall Street estimates.

Airbnb Inc dipped 6.2% after the vacation rental company forecast bookings for the current quarter at par with the record-breaking previous one, disappointing investors.