After ending yesterday’s choppy trading session modestly higher, stocks may see further upside in early trading on Wednesday. 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.
The markets may benefit from recent upward momentum, which helped lift the Dow and S&P 500 to record highs last week despite waning optimism about the Federal Reserve cutting interest rates in March.
While CME Group’s FedWatch Tool suggests the chances of March rate cut are just 20.5 percent, the Fed is still expected to begin lowering rates sometime in the coming months.
Recent upbeat economic data has seemingly reduced the likelihood of a near-term rate cut but a strong economy is still seen as a net positive for stocks.
A positive reaction to some of the latest earnings news may also generate buying interest, with shares of Enphase Energy (ENPH) soaring in pre-market trading after the solar inverter maker reported weaker than expected fourth quarter revenues but said it expects demand to improve throughout 2024.
Auto giant Ford (F) is also likely to see initial strength after reporting better than expected fourth quarter results, providing upbeat guidance for 2024 and announcing a supplemental dividend of 18 cents per share.
On the other hand, shares of Snap (SNAP) are plummeting in pre-market trading after the Snapchat parent reported mixed fourth quarter results and forecast first quarter sales below analyst estimates.
In U.S. economic news, the Commerce Department released a report this morning showing the U.S. trade deficit widened in the month of December.
The Commerce Department said the trade deficit increased to $62.2 billion in December from a revised $61.9 billion in November.
Economists had expected the trade deficit to narrow to $62.2 billion from the $63.2 billion originally reported for the previous month.
Following the significant volatility seen over the past few sessions, stocks showed a lack of direction throughout the trading day on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing modestly higher.
The Dow climbed 141.24 points or 0.4 percent to 38,521.36, the S&P 500 rose 11.42 points or 0.2 percent to 4,954.23 and the Nasdaq inched up 11.32 points or 0.1 percent to 15,609.00.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. China’s Shanghai Composite Index surged by 1.4 percent, while Hong Kong’s Hang Seng Index fell by 0.3 percent and Japan’s Nikkei 225 Index edged down by 0.1 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has fallen by 0.4 percent, the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.1 percent.
In commodities trading, crude oil futures are advancing $0.61 to $73.92 a barrel after climbing $0.53 to $73.31 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,050.60, down $0.80 compared to the previous session’s close of $2,051.40. On Tuesday, gold rose $8.50.
On the currency front, the U.S. dollar is trading at 148.12 yen compared to the 147.94 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0776 compared to yesterday’s $1.0755.
Business News
U.S. Stocks May Move To The Upside In Early Trading
2024-02-07 13:54:46
