Wall Street surges early, oil prices jump after Hamas leader killed in Tehran

Most indexes were sharply higher in early trading on Wall Street Wednesday amid a flurry of earnings ahead of the Federal Reserve's interest rate policy decision.

Oil prices jumped more than $2 a barrel after Hamas's top political leader died in an air strike in Tehran.

Futures for Dow Jones Industrial Average were up a modest 0.2%, while futures for the S&P 500 rose 1.1% and futures for the tech-heavy Nasdaq climbed 1.8%.

Boeing shares were up 2% after the troubled aircraft manufacturer posted a $1.4 billion second-quarter loss but announced that Robert "Kelly" Ortberg, 64, a former CEO at aerospace supplier Rockwell Collins, would succeed David Calhoun as CEO.

Match Group, which owns the dating app Tinder and others, said revenue from its Hinge app help boost its second-quarter results. Match shares rose 10.5% before the bell.

Making moves overnight were Microsoft and Starbucks, which reported their latest results after the bell on Tuesday. Microsoft shares fell 3.4% after it reported that revenue from its cloud computing business came in below analyst expectations, despite an otherwise strong quarter.

Starbucks gained more than 4% even as it reported weaker sales. Investors were encouraged by the company's optimism that successful new products and improvements in efficiency would help turn things around in its next fiscal year.

Markets were awaiting a policy decision later in the day from the Federal Reserve, with another expected on Thursday from the Bank of England.

Traders expect the Fed to hold off on cutting interest rates when it announces its decision on Wednesday but to go ahead with a rate cut at its next meeting in September.

Inflation in the 20 countries that use the euro ticked up to 2.6% in July, a report said Wednesday, stubbornly above the European Central Bank's target. That complicates the ECB's next decision on whether to cut interest rates and boost growth as the economy struggles to stage a convincing recovery from more than a year of stagnation.

Germany's DAX picked up 0.5% and the CAC 40 rose 1.1%. In London, the FTSE was up 1.2%.

In the Iranian capital early Wednesday, Haniyeh died in a predawn airstrike, Iran and the militant group Hamas said, blaming Israel for a shock assassination that could escalate conflict in the region, potentially affecting oil supplies.

There was no immediate comment from Israel, which has pledged to kill Ismail Haniyeh and other Hamas leaders over the group's Oct. 7 attack on southern Israel in which the Palestinian militant group killed 1,200 people and took some 250 others hostage.

U.S. benchmark crude oil gained $2.64 to $77.38 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, picked up $2.38 to $80.45 per barrel.

In Asian trading, Japan's benchmark Nikkei 225 recouped earlier losses, closing 1.5% higher at 39,101.82 after the central bank opted to raise its benchmark rate to about 0.25% from a range of zero to 0.1%.

The rate hike was expected to boost the Japanese yen, which bounced during the day and then began gaining as markets in Europe opened. The dollar was trading at 149.91 yen early Wednesday, down from 152.78 yen late Tuesday.

The dollar had recently exceeded the 160 yen level, adding to pressure for action from the BOJ, which has remained cautious about stifling growth and is just inching away from its ultra-lax monetary policy.

The euro rose to $1.0844 from $1.0815.

"It seems that policymakers are inclined to raise rates to limit excessive declines in the yen but are being careful not to fuel any overreaction to the move," Yeap Jun Rong of IG said in a commentary.

The Hang Seng in Hong Kong added 2% to 17,344.60 and the Shanghai Composite index was up 2.1% at 2,938.75 after official data showed China's July manufacturing activity contracted for a third straight month, fueling expectations that Beijing will need to roll out more stimulus to counter a slowdown.

The smaller Shenzhen A-share index of local companies jumped 3.3%.

Australia's S&P/ASX 200 advanced 1.8% to 8,092.30 after data showed the annual rate of inflation has risen to 3.8% from 3.6% when the year started, and the consumer price index rose 1% compared with the last quarter.

In South Korea, the Kospi rose 1.2%, to 2,770.69 after Samsung Electronics reported a 15 fold increase in its operating profit in the last quarter.

On Tuesday, the S&P 500 slipped 0.5% and the Dow rose 0.5%. The Nasdaq composite sank 1.3%. The Russell 2000 index of smaller stocks added 0.3% Tuesday to stretch its market-leading gain for the month to 9.5%.