Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Wednesday, with stocks likely to show a lack of direction after ending the previous session mostly higher.

Traders may be reluctant to continue buying stocks following the recent strength in the markets, which lifted the Nasdaq and S&P 500 to their best closing levels in almost two years on Tuesday.

While market sentiment generally remains positive amid expectations of near-term interest rates cuts, traders may wait for additional catalysts before pushing stocks meaningfully higher.

A lack of major U.S. economic data may also keep some traders on the sidelines amid a relatively quiet week on the U.S. economic front.

Reports on weekly jobless claims and pending home sales may attract some attention on Thursday, although trading activity is likely to remain subdued ahead of the New Year’s weekend.

Stocks moved mostly higher during trading on Tuesday, with the major averages all moving to the upside after ending last Friday’s session narrowly mixed. The advance on the day represents a positive start to the final trading week of 2023.

The major averages pulled back off their best levels going into the close but remained in positive territory. The Dow rose 159.36 points or 0.4 percent to 37,545.33, the Nasdaq advanced 81.60 points or 0.5 percent to 15,074.57 and the S&P 500 climbed 20.12 points or 0.4 percent to 4,774.75.

A surge by shares of Intel (INTC) provided a boost to the markets, with the semiconductor giant spiking by 5.2 percent to its best closing level in well over a year.

The jump by Intel came following news the Israeli government has agreed to give the company a $3.2 billion grant toward the construction of a new $25 billion chip-making facility in southern Israel.

Stocks also continued to benefit from optimism about the outlook for interest rates following last week’s tamer-than-expected consumer price inflation data.

On the heels of the data, CME Group’s FedWatch Tool is indicating a 72.7 percent chance the Federal Reserve will cut rates by a quarter point in March.

Energy stocks saw considerable strength on the day, as the price of crude oil moved sharply higher amid concerns about geopolitical tensions.

With crude for February delivery surging $2.01 to $75.57 a barrel, the Philadelphia Oil Service Index jumped by 2.1 percent and the NYSE Arca Oil Index climbed by 1.3 percent.

Intel also helped lead an advance by semiconductor stocks, driving the Philadelphia Semiconductor Index up by 1.8 percent to a record closing high.

Networking, banking and telecom stocks also showed notable moves to the upside over the course of the trading session.

Commodity, Currency Markets

Crude oil futures are falling $0.80 to $74.77 a barrel after surging $2.01 to $75.57 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,078.80, up $9 compared to the previous session’s close of $2,069.80. On Tuesday, gold inched up $0.70.

On the currency front, the U.S. dollar is trading at 142.58 yen compared to the 142.40 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1065 compared to yesterday’s $1.1042.

Asia

Renewed rate cut optimism amidst easing inflationary pressures in the U.S. lifted Asian stocks on Wednesday.

China’s Shanghai Composite Index climbed 0.5 percent to finish trading at 2,914.61. The day’s trading ranged between 2,917.96 and 2,890.17. The Shenzhen Component Index also added 0.4 percent to close at 9,191.74.

The Japanese benchmark Nikkei 225 Index jumped 1.2 percent to end trading at 33,681.24, tracking the positive sentiment on Wall Street. The day’s trading range was between 33,535 and 33,770.

Sumitomo Dainippon Pharma and Kawasaki Kisen Kaisha both surged more than 5 percent. Softbank Group, Nippon Yusen K.K as well as Mitsui O.S.K. Lines gained more than 4 percent.

J. Front Retailing declined 2.4 percent. Nippon Paper Industries and retail business Takashimaya both slipped more than half percent.

The Hang Seng Index of the Hong Kong Stock Exchange surged 1.7 percent from the previous close to finish trading at 16,624.84. The day’s trading range was between a high of 16,673.57 and a low of 16,439.26.

The Korean Stock Exchange’s Kospi Index added 0.4 percent to close trading at 2,613.50. The day’s trading range was between 2,590.08 and 2,613.50.

Australia’s S&P/ASX 200 Index closed trading at 7,561.20, gaining 0.8 percent. The day’s trading range was between 7,501.60 and 7,593.40.

Liontown Resources and Arcadium Lithium both added 6.3 percent. Genesis Minerals, healthcare equipment business Healius and semiconductor business Weebit Nano all added around 4.5 percent.

Core Lithium plunged 7.7 percent. Boss Energy declined 2.8 percent. Tabcorp Holdings, Light & Wonder as well as Insurance Australia Group declined more than 1 percent.

The NZX 50 of the New Zealand Stock Exchange rose 0.4 percent to close trading at 11,678.43 versus the previous close of 11,634.43. Trading ranged between 11,593.02 and 11,678.43.

Fonterra Shareholders Fund surged 4.8 percent, followed by healthcare business Pacific Edge that added 4.4 percent. Restaurant Brands New Zealand, Oceania Healthcare and Investore Property all gained more than 2 percent.

Fisher & Paykel Healthcare slid 1.4 percent, followed by Property for Industry that fell 1.1 percent. Arvida Group, Contact Energy and Chorus all suffered declines of less than a percent.

Europe

European stocks have resumed trading on a positive note after a holiday break, as tamer-than-expected U.S. inflation readings have bolstered rate cut hopes.

While the U.K.’s FTSE 100 Index has climbed by 0.6 percent, the German DAX Index is up by 0.3 percent and the French CAC 40 Index is up by 0.2 percent.

In the U.K., Anglo American has surged 3.5 percent, followed by Entain that has rallied 3.2 percent. Rentokil Initial, Intertek Group as well as Ocado Group have added more than 2 percent.

Vodafone Group has slipped 1.5 percent. BT Group has also declined more than 1.4 percent.

Siemens Energy tops the gainers list in Germany, with a surge of more than 5 percent. Bayer has rallied 2.5 percent. Infineon Technologies, Rheinmetall and adidas have all gained more than 1 percent.

Deutsche Telekom and E.ON have declined 0.9 percent. Fresenius, Volkswagen and Munchener Ruck have also declined more than half a percent.

In France, Alstom tops with a gain of 2.1 percent. Capgemini and STMicroelectronics both added more than 1 percent. Orange is the greatest laggard with a decline of more than 1 percent.

U.S. Economic Reports

The Treasury Department is scheduled to announce the results of this month’s auction of $58 billion worth of five-year notes at 1 pm ET.