The major U.S. index futures are currently pointing to sharply higher on Wall Street on Wednesday, with stocks likely to see an early rally following the mixed performance seen in the previous session.

Stocks may benefit from a positive reaction to some of the latest corporate earnings news from companies like Advanced Micro Devices (NASDAQ:AMD).

Shares of AMD are surging by 7.9 percent in pre-market trading after the chipmaker reported second quarter results that exceeded analyst estimates on both the top and bottom lines.

Coffee giant Starbucks (NASDAQ:SBUX) is also seeing significant pre-market strength after reporting fiscal third quarter earnings in line with estimates and maintaining its full-year guidance.

Shares of DuPont (NYSE:DD) have also surged in pre-market trading after the chemical giant reported better than expected second quarter results.

On the other hand, shares of Microsoft (NASDAQ:MSFT) may move to the downside after the tech giant reported quarterly earnings and revenue that beat expectations but disappointing cloud computing results.

The upward momentum on Wall Street also comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement could have a significant impact on the outlook for the central bank’s next decision in September.

With Fed officials repeatedly saying they need “greater confidence” inflation is slowing before cutting rates, recent inflation data has led to optimism about a September rate cut.

According to CME Group’s FedWatch Tool, there is currently an 87.7 percent chance the Fed will lower rates by a quarter point in September and an 11.9 percent chance of a half point rate cut.

After ending Monday’s choppy trading session narrowly mixed, the major U.S. stock indexes moved in more starkly opposite directions during trading on Tuesday. While the tech-heavy Nasdaq moved sharply lower, the Dow ended the day firmly positive.

The Nasdaq tumbled 222.78 points or 1.3 percent to 17,147.41, ending the session at its lowest closing level in well over a month. The S&P 500 also fell 27.10 points or 0.5 percent to 5,436.44, while the narrower Dow climbed 203.40 points or 0.5 percent to 40,743.33.

The steep drop by the Nasdaq came as tech stocks came under pressure as the day progressed, with AI darling and sector leader Nvidia (NASDAQ:NVDA) plunging by 7.0 percent to a two-month closing low.

Microsoft (NASDAQ:MSFT) and Advanced Micro Devices (NASDAQ:AMD) also moved to the downside ahead of the release of their quarterly results after the close of today’s trading.

The weakness in the sector may have reflected concerns the earnings won’t be strong enough to support further upside after tech stocks helped lead the markets to record highs earlier this month.

Among tech stocks, semiconductor stocks turned in some of the worst performances, resulting in a 3.9 percent nosedive by the Philadelphia Semiconductor Index. The index slumped to its lowest closing level in well over two months.

Shares of Lattice Semiconductor (NASDAQ:LSCC) plummeted by 9.4 after the chipmaker reported weaker than expected second quarter results and provided disappointing third quarter revenue guidance.

Computer hardware are saw significant weakness on the day, dragging the NYSE Arca Computer Hardware Index down by 2.2 percent.

On the other hand, telecom stocks showed a substantial move to the upside, driving the NYSE Arca North American Telecom Index up by 3.5 percent.

Network solutions provider Lumen Technologies (NYSE:LUMN) helped lead the telecom sector higher, skyrocketing by 37.6 percent.

Airline stocks also moved sharply higher on the day, with the NYSE Arca Airline Index soaring by 2.8 percent. Shares of JetBlue (NASDAQ:JBLU) spiked by 12.3 percent after the airline reported an unexpected second quarter profit on better than expected revenues.

Meanwhile, the advance by the Dow comes despite a steep drop by shares of Merck (NYSE:MRK), with the drug giant plummeting by 9.8 percent.

The sell-off by Merck came after the company reported better than expected second quarter results but provided disappointing full-year earnings guidance.

Shares of Procter & Gamble (NYSE:PG) also plunged by 4.8 percent after the consumer products giant reported second quarter earnings that beat analyst estimates but weaker than expected revenues.

At the same time, Dow components Travelers (NYSE:TRV) Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM) posted strong gains on the day.