Stock futures put a recent earnings rally on pause on Wednesday ahead of an expected plan from the Trump administration on taxes.
S&P 500 futures were down 0.05%, Dow Jones Industrial Average futures added 0.11%, and Nasdaq futures climbed 0.03%.
Treasury Secretary Steven Mnuchin on Wednesday confirmed that the highly anticipated tax plan would include a reduction in the corporate tax rate to 15% to 35%. Mnuchin said Donald Trump's tax cuts would be "the biggest tax cut and the largest tax reform in the history of our country."
A reduced corporate tax rate would greatly lower federal revenue. One analysis from the conservative-leaning Tax Foundation during the campaign estimated that a reduction in the corporate tax rate would cut federal revenue by $2 trillion over 10 years.
Trump's proposed tax plan would still need to be translated into actual legislation that could pass Congress, a process that could take months. Such a sharp decline in the corporate tax rate could be a sticking point for Congress.
Stock markets have rallied to new heights since the presidential election in November on Trump's tax plans, betting that an overhaul of the tax code would be beneficial to companies' financial health and eventually act as economic stimulus. However, faith in the Trump administration's ability to enact campaign promises faltered earlier this year after the president's promise to repeal and replace Obamacare failed before heading to Congress for a vote.
Another big rally on Wall Street on Tuesday made for a day of milestones: the Dow and S&P 500 enjoyed their best back-to-back gains of the year, while the Nasdaq scored a new record and topped its never-before-seen 6,000 milestone. The Dow owed much of its gains to better-than-expected earnings from industry leaders including Caterpillar (CAT) , McDonald's (MCD) and DuPont (DD) .
The Nasdaq topped the psychologically milestone of 6,000 for the first time Tuesday, reaping the rewards of a broader market rally that pushed the tech-heavy index up 11% since the beginning of the year and nearly 22% over the past 12 months. Tech industry leaders including Apple (AAPL) , Amazon (AMZN) and Facebook (FB) have contributed to recent gains. The Nasdaq first hit 5,000 in March 2000, the tail-end of the dotcom bubble. It took less than a year for the Nasdaq to move from 4,000 to 5,000.
Twitter (TWTR) surged 10% in premarket trading after narrowing its quarterly loss and beating adjusted earnings estimates. A net loss of 9 cents a share was slightly less than 12 cents a share in the year-ago quarter. Adjusted earnings of 11 cents a share were more than 5 times consensus. Revenue fell 8% to $548 billion, but exceeded estimates of $517 million. Average monthly active users increased 6% from the fourth quarter to 328 million.
Boeing (BA) reported a mixed quarter with earnings above estimates, but revenue below. Adjusted earnings of $2.01 a share came in a dime above expectations. Revenue slid nearly $2 billion to $20.9 billion and fell short of estimates of $21.3 billion. CEO Dennis Muilenburg said the company remained on track to "achieve our full-year revenue, earnings and cash flow targets as our teams deliver on our large and diverse order backlog."
Arconic (ARNC) rose 4% in premarket trading on Wednesday after topping quarterly estimates and reporting an increase in revenue. The metal-alloy manufacturer earned 33 cents a share over its first quarter, 9 cents higher than estimates. Sales increased nearly 5% to $3.2 billion, above consensus of $200 million.
Chipotle (CMG) surged before the bell as improving traffic trends benefited its top- and bottom-line. The burrito chain swung to a profit of $1.60 a share from losses of 88 cents a share in the year-ago quarter. Analysts anticipated earnings of $1.29 a share. Revenue surged 28% to $1.07 billion, exceeding estimates of $1.05 billion. Comparable sales increased 17.8%, above estimates of 15.5%. Chipotle has slowly tempted customers back after a food-safety scandal in late 2015.
Texas Instruments (TXN) also exceeded quarterly estimates. First-quarter net income of 89 cents a share came in 6 cents above forecasts. Revenue increased 13% to $3.4 billion, $100 million above estimates.
Wynn Resorts (WYNN) beat analysts' estimates on its top- and bottom-line over its first quarter as gaming revenue in gambling destination Las Vegas continued to improve. Earnings of $1.24 a share topped estimates by 27 cents. Revenue of $1.48 billion came in $100 million above consensus.
So far this earnings season, nearly one-third of S&P 500 companies have reported on their recent quarterly performance. Of those that have reported, nearly 78% have exceeded first-quarter earnings estimates, above the historical average of 64%. Companies have had generally weaker performances on the top-line with 64% topping consensus, beating out the historical average of 59% by a narrower margin.