Wall Street poised for higher open as US-Japan trade deal lifts sentiment

• Futures up: Dow 0.52%, S&P 500 0.35%, Nasdaq 0.08%
• Tariffs on Japanese autos cut to 15% from 27.5%
• AT&T beats quarterly profit estimates, but shares slip
• Texas Instruments slumps as tariff uncertainty hits demand

By Nikhil Sharma and Pranav Kashyap

July 23 (Reuters) - Wall Street was poised for a stronger start on Wednesday after President Donald Trump struck a trade deal with Japan, shoring up expectations of further agreements ahead of the fast-approaching August 1 deadline.

The pact will slash tariffs on the Japanese auto sector to 15% from 27.5%, with duties on other goods also dropping to 15% from 25%.

At 8:24 a.m. ET, S&P 500 E-minis EScv1 were up 22.5 points, or 0.35%, Nasdaq 100 E-minis NQcv1 were up 17.75 points, or 0.08%, and Dow E-minis YMcv1 were up 233 points, or 0.52%.

Futures tracking the domestically focused Russell 2000 small-cap index RTYcv1 .RUT rose 0.9%.

Representatives from Washington and the European Union were headed into negotiations, hoping to secure a breakthrough deal. At the same time, the European Commission declared plans to submit counter-tariffs on 93 billion euros ($109 billion) of U.S. goods for approval to EU members.

"The United States has been working very hard on trying to get a lot of trade deals in time before the August 1st deadline, and it seems like they're starting to get some momentum. So I do think this is a very positive sign," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

Meanwhile, the S&P 500 notched its eighth record close in a month on Tuesday, buoyed by easing trade tensions, a resilient U.S. economy, and upbeat second-quarter earnings.

The Dow climbed 0.4%, now within striking distance of its all-time high, while the Nasdaq slipped as declines in Meta and Microsoft weighed on the tech-heavy index.

Investors are now laser-focused on earnings from the "Magnificent Seven" — the market's star performers who have powered stocks to record highs.

Tesla TSLA.O and Alphabet GOOGL.O are set to report after the bell on Wednesday. With AI optimism running high and valuations stretched, expectations for these tech giants are sky-high, leaving little margin for disappointment. Both the stocks eased about 0.3% premarket.

In earnings-focused moves, Texas Instruments TXN.O tumbled 9.9% after its quarterly profit forecast failed to impress investors, as it pointed to weaker-than-expected demand for its analog chips from some customers and underscored tariff-related uncertainty.

The earnings also weighed on its peer analog chipmakers, with NXP Semiconductors NXPI.O, Analog Devices ADI.O and ON Semiconductor ON.O falling between 3.1% and 5.4%.

Automaker General Motors GM.N also became a casualty of the trade war on Tuesday when it said Trump's tariffs took a $1.1 billion hit on its quarterly earnings, sending its shares down more than 8%.

Toymaker Hasbro HAS.O rose 0.5% after raising its annual revenue forecast, while AT&T T.N slipped 3.4% despite beating quarterly profit estimates.

In economic data, existing home sales numbers for June are due on the day. Thursday's weekly jobless claims numbers and S&P Global's flash PMI data will be closely assessed to gauge economic health in the wake of tariff uncertainties.

Following a mixed set of economic data last week, traders have ruled out an interest rate cut by the Federal Reserve next week. Odds for a September reduction stand at 56%, according to the CME FedWatch tool.

The Fed's July meeting will follow on the heels of mounting concerns about its independence amid political interference and President Trump's persistent attacks on Chair Jerome Powell for his reluctance to cut rates.