After ending the previous session notably lower, stocks are likely to see further downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.
Lingering concerns about lawmakers’ ability to reach an agreement on increasing the U.S. debt ceiling may continue to weigh on Wall Street.
While negotiations have continued this week, traders remain worried about reports suggesting a lack of progress towards a deal.
“Talks were always going to go down to the wire and an 11th hour deal is still expected to be made,” said Edward Moya, senior market analyst at OANDA. “What could be making some investors nervous is that some House Republicans might not be convinced that the X-date of June 1st is accurate or that a default would be the end of the world.”
He added, “If the actual X-date ends up being closer to June 7th, that means we could see market stress build up leading to that point.”
Nonetheless, trading activity may be somewhat subdued ahead of the release of the minutes of the Federal Reserve’s latest monetary policy meeting later in the day.
The minutes may shed additional light on the outlook for interest rates amid widespread expectations the Fed will leave rates unchanged at its next meeting in mid-June.
U.S. stocks ended notably lower on Tuesday after staying weak throughout the day’s session due to sustained selling at several counters.
A lack of significant progress in U.S. debt ceiling negotiations weighed on sentiment. Traders largely shrugged off data showing fairly sharp growth in the nation’s private sector activity.
The major averages all ended notably lower. The Dow ended lower by 231.07 points or 0.7 percent at 33,055.51. The S&P 500 ended down 47.05 points or 1.1 percent at 4,145.58, while the Nasdaq settled at 12,560.25, down 160.53 points or 1.3 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.9 percent, while China’s Shanghai Composite Index tumbled by 1.3 percent.
The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has plunged by 1.7 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 1.6 percent.
In commodities trading, crude oil futures are jumping $1 to $73.91 a barrel after climbing $0.86 to $72.91 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,985.50, up $11 compared to the previous session’s close of $1,974.50. On Tuesday, gold surged edged down $2.70.
On the currency front, the U.S. dollar is trading at 138.67 yen compared to the 138.59 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0786 compared to yesterday’s $1.0770.
Business News
U.S. Stocks May See Further Downside In Early Trading
2023-05-24 12:47:46
