Stocks may move to the upside in early trading on Wednesday, regaining ground after moving sharply lower over the three previous sessions. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.
Traders may once again look to pick up stocks at reduced levels after the recent weakness dragged the major averages down to their lowest levels in a month.
Early bargain hunting faltered in Tuesday’s session, however, leading to a sharp pullback by stocks amid lingering concerns about higher interest rates and the economic outlook.
In remarks earlier this morning, Cleveland Federal Reserve President Loretta Mester said she expects interest rates to be raised above 4 percent by early next year.
Mester also said she does not anticipate the Federal Reserve cutting interest rates in 2023, with the Fed likely to keep rates at an elevated level in an effort to combat inflation.
On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. increased by much less than expected in the month of August.
ADP said private sector employment rose by 132,000 jobs in August after jumping by nearly 270,000 jobs in July. Economists had expected employment to surge by 288,000 jobs.
“Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy‘s conflicting signals,” said ADP chief economist Nela Richardson. “We could be at an inflection point, from super-charged job gains to something more normal.”
ADP suspended its jobs report for June and July as the firm revamped its methodology and entered into a partnership with the Stanford Digital Economy Lab.
Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of August.
The Chicago business barometer is expected to edge down to 52.0 in August from 52.1 in July, with a reading above 50 indicating growth.
After extending last Friday’s sell-off to start the week, stocks showed another significant move to the downside during trading on Tuesday. The major averages all moved notably lower, ending the session at their worst levels in a month.
The major averages climbed off their lows of the session in late-day trading but remained firmly negative. The Dow slumped 308.12 points or 1 percent to 31,790.87, the Nasdaq plunged 134.53 points or 1.1 percent to 11,883.14 and the S&P 500 tumbled 44.45 points or 1.1 percent to 3,986.16.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while South Korea’s Kospi advanced by 0.9 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has slumped by 1.2 percent, the French CAC 40 Index is down by 0.5 percent and the German DAX Index is down by 0.1 percent.
In commodities trading, crude oil futures are tumbling $2.49 to $89.15 a barrel after plummeting $5.37 to $91.64 barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,723.90, down $12.40 compared to the previous session’s close of $1,736.30. On Tuesday, gold fell $13.40.
On the currency front, the U.S. dollar is trading at 138.70 yen compared to the 138.79 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $0.9997 compared to yesterday’s $1.0015.
Business News
U.S. Stocks May Stage Another Early Recovery Attempt
2022-08-31 12:48:23
