Futures Pointing To Slightly Higher Open On Wall Street

The major U.S. index futures are currently pointing to a slightly higher open on Wednesday, with stocks likely to extend the lackluster performance seen to start the week.

A lack of major market-moving catalysts may contribute to another lackluster session as traders continue to look ahead to next week’s Federal Reserve meeting.

The Fed is due to announce its latest monetary policy decision next Wednesday, with the central bank widely expected to pause its recent series of interest rate hikes.

Key inflation reports are also likely to be in the spotlight next week, as the data could impact whether the Fed resumes its rate hikes next month.

CME Group’s FedWatch Tool is currently indicating a 78.2 percent chance the Fed will leave rates unchanged next week but a 54.0 percent chance of another quarter point increase in July.

Stocks showed a lack of direction over the course of the trading day on Tuesday, extending the lackluster performance seen in the previous session. The major averages once again spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day in positive territory. The Nasdaq climbed 46.99 points or 0.4 percent to 13,276.42, the S&P 500 rose 10.06 points or 0.2 percent to 4,283.85 and the Dow inched up 10.42 points or less than a tenth of a percent to 33,573.28.

Traders remained reluctant to make significant moves as they continued to look ahead to next week’s Federal Reserve meeting.

A lack of major U.S. economic data also kept traders on the sidelines, although reports on the U.S. trade deficit and weekly jobless claims may attract some attention in the coming days.

Among individual stocks, shares of GitLab (GTLB) soared after the software development platform company reported a narrower than expected fiscal first quarter loss on revenues that exceeded analyst estimates.

Recreational vehicle manufacturer Thor Industries (THO) also surged after reporting fiscal third quarter results that beat expectations and raising its full-year earnings guidance.

On the other hand, Coinbase (COIN) saw significant weakness after the SEC charged the company with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency.

Despite the lackluster performance by the broader markets, airline stocks moved sharply higher on the day, with the NYSE Arca Airline Index soaring by 3.6 percent to its best closing level in almost a year.

Substantial strength was also visible among housing stocks, as reflected by the 3.2 percent surge by the Philadelphia Housing Sector Index. The index jumped to a well over one-year closing high.

Banking stocks also showed a significant move to the upside, driving the KBW Bank Index up by 3.0 percent to its best closing level in over a month.

Tobacco, steel and brokerage stocks also saw considerable strength on the day, while healthcare stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are climbing $0.70 to $72.44 a barrel after falling $0.41 to $71.74 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,974.70, down $6.80 compared to the previous session’s close of $1,981.50. On Tuesday, gold rose $7.20.

On the currency front, the U.S. dollar is trading at 139.55 yen compared to the 139.63 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0705 compared to yesterday’s $1.0693.

Asia

Asian stocks turned in a mixed performance on Wednesday as Chinese trade data disappointed and investors awaited cues from key central bank meetings due next week.

Official data showed Chinese exports fell 7.5 percent from a year earlier in May, marking the first drop in three months. Imports fell 4.5 percent.

Gold dipped as the dollar held firm despite the prospect of a pause in the Federal Reserve’s interest rate hike cycle next week.

Oil extended overnight losses as fuel demand concerns outweighed optimism over OPEC’s recent production cuts.

China’s Shanghai Composite Index fluctuated before finishing marginally higher at 3,197.76 on speculation the country may unveil fresh economic stimulus to boost growth. Hong Kong’s Hang Seng Index climbed 0.8 percent to 19,252, buoyed by heavyweight technology stocks.

Japanese shares tumbled, with the Nikkei 225 Index recording its sharpest fall in 12 weeks as investors locked in recent gains.

The Nikkei 225 Index slumped 1.8 percent to 31,913.74 after having climbed to 33-year highs in recent sessions on the back of strong quarterly earnings and dovish signals from the Bank of Japan.

The broader Topix Index ended 1.3 percent lower at 2,206.30, dragged down by chip-related stocks. Advantest, Tokyo Electron and Screen Holdings all fell around 4 percent.

Seoul stocks ended little changed with a positive bias, giving up earlier gains ahead of interest rate decisions from the Federal Reserve and the European Central Bank next week. Korean Air, LG Chem and SK Innovation jumped 2-3 percent.

Australian stocks edged down slightly after data showed first quarter GDP grew at the weakest pace in 1-1/2 years due to pressure from high inflation and interest rates.

The benchmark S&P/ASX 200 Index slipped 0.2 percent to 7,118 and the broader All Ordinaries index ended 0.1 percent lower at 7,310.40, with energy stocks leading losses.

PolyNovo shares soared 15.8 percent after the disruptive medical device company posted a record monthly sales of $7.2 million in May.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index fell 1.0 percent to 11,759.15.

Europe

European shares are subdued on Wednesday, as Chinese trade data came in below expectations and investors exercised caution ahead of key central bank meetings next week.

Meanwhile, data showed German industrial output rose less than expected in April. Industrial production in the eurozone’s largest economy rose 0.3 percent from the previous month, missing forecasts for a 0.6 percent rise.

Elsewhere, France’s foreign trade deficit increased at the start of the second quarter as exports fell amid a rise in imports, data from the customs office revealed.

The trade deficit rose to 9.71 billion euros in April from 8.39 billion euros in March, while the expected shortfall was 7.7 billion euros.

While the German DAX Index is just above the unchanged line, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 0.1 percent.

Zara-owner Inditex has moved sharply higher after reporting fiscal first quarter earnings that exceeded expectations.

GSK has edged up slightly after receiving authorization for its respiratory syncytial virus vaccine Arexvy from the European Commission.

Stratec SE has also advanced. The company further expanded its presence in the United States by acquiring Natech Plastics.

Meanwhile, U.K. homebuilders Persimmon, Berkeley Group Holdings and Taylor Wimpey have fallen after Halifax reported the first year-on-year decline in U.K. house prices since 2012.

Online fashion group N Brown has also moved sharply lower a day after posting declines in full-year revenue and profit.

U.S. Economic Reports

A report released by the Commerce Department on Wednesday showed the U.S. trade deficit widened significantly in the month of April.

The Commerce Department said the trade deficit increased to $74.6 billion in April from a revised $60.6 billion in March.

Economists had expected the trade deficit to jump to $75.2 billion from the $64.2 billion originally reported for the previous month.

The wider trade deficit came as the value of exports plunged by 3.6 percent to $249.0 billion, while the value of imports surged by 1.5 percent to $323.6 billion.

At 10:30 am ET, the Energy Information Administration is scheduled to release its report on oil inventories in the week ended June 2nd.

Crude oil inventories are expected to increase by 1.5 million barrels after climbing by 4.5 million barrels in the previous week.

The Federal Reserve is due to release its report on consumer credit in the month of April at 3 pm ET. Consumer credit is expected to decrease to $22.0 billion in April from $26.5 billion in March.