U.S. Stocks May Lack Direction Ahead Of Fed Minutes

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 following the strong upward move seen in the previous session.

Traders may be reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve’s latest monetary policy meeting later in the day.

The minutes of the Fed’s September meeting, when the central bank decided to slash interest rates by 50 basis points, may shed light on the outlook for rates.

Report on consumer and producer price inflation due to be released in the coming days may also provide clues about how aggressively the Fed will lower rates in the coming months.

U.S. stocks moved higher on Tuesday, with technology stocks turning in a strong performance. Pushing geopolitical concerns and interest-rate uncertainty aside, investors picked up stocks, choosing to focus on the earnings season.

The major averages all ended on a firm note. The Dow started off on a sluggish note and remained that way till midway through the day’s session before moving higher. The index ended the day with a gain of 126.13 points or 0.3 percent at 42,080.37.

The S&P 500 settled at 5,751.13, gaining 55.19 points or 1.0 percent, while the Nasdaq ended higher by 259.01 points or 1.5 percent at 18,182.92.

Travelers Companies Inc., Honeywell, Apple, Home Depot, Amazon, Microsoft and Salesforce gained 1 to 2 percent.

Palo Alto Networks, up nearly 5 percent, was the top gainer in the Nasdaq. NVIDIA climbed about 3.7 percent, and Synopsis gained 3.2 percent. CoStar Group, Netflix, Broadcom, Autodest, Cadence, Airbnb, Booking Holdings and Adobe advanced 2 to 3 percent.

PepsiCo gained about 2 percent. The company announced today that its bottom line came in at $2.930 billion, or $2.13 per share, compared with $3.092 billion, or $2.24 per share in last year’s third quarter. The numbers, however, beat the Street estimates.

ExxonMobil, Valero Energy, Marathon Petroleum Corpoation, Super Micro Computer, Caterpillar, Chevron and American Express were among the notable losers.

On the economic front, the trade deficit in the U.S. narrowed to $70.4 billion in August 2024, the lowest in five months, from an upwardly revised $78.9 billion in July.

Exports increased 2 perecent to a record high of $271.8 billion, while imports dropped 0.9 percent to $342.2 billion.

Commodity, Currency Markets

Crude oil futures are slipping $0.11 to $73.46 a barrel after plummeting $3.57 to $73.57 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,634.80, down $0.60 compared to the previous session’s close of $2,635.40. On Tuesday, gold plunged $30.60.

On the currency front, the U.S. dollar is trading at 148.85 yen compared to the 148.20 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0955 compared to yesterday’s $1.0980.

Asia

Asian stocks ended mixed on Wednesday as China’s stimulus rally fizzled out, the conflict in the Middle East persisted and investors awaited Federal Reserve meeting minutes as well as U.S. inflation data for interest rate clues.

The dollar held steady after a notably rally and gold drifted lower while oil recovered some ground, after having fallen more than 4 percent on Tuesday following reports of a possible Hezbollah-Israel ceasefire.

Chinese stocks plunged as investors booked profits after recent rallies. The benchmark Shanghai Composite Index slumped 6.6 percent to 3,258.86 after officials failed to boost confidence in stimulus plans aimed at reviving the economy.

Hong Kong’s Hang Seng Index fluctuated before finishing 1.4 percent lower at 20,637.24 after reports emerged that China’s finance ministry will hold a briefing on fiscal policy on Saturday.

Japanese markets advanced as tech stocks tracked their U.S. peers higher. The Nikkei 225 Index climbed 0.9 percent to 39,277.96, while the broader Topix Index settled 0.3 percent higher at 2,707.24.

Nvidia supplier Advantest jumped 3.7 percent, Tokyo Electron added 1.2 percent and technology investor SoftBank Group rose 1.3 percent.

Seven & I Holdings surged 4.7 percent after Canada’s Alimentation Couche-Tard increased its offer for the retailer by more than 20 percent.

Uniqlo-owner Fast Retailing, which is set to announce its earnings results after the closing bell on Thursday, rose 1.1 percent.

South Korean financial markets were closed for a public holiday.

Australian markets edged up slightly as banks rose for a third straight session, offsetting declines in the mining and energy sectors.

The benchmark S&P/ASX 200 Index inched up 0.1 percent to 8,187.40, while the broader All Ordinaries Index ended 0.2 percent higher at 8,456.80.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rallied 1.8 percent to 12,776.13 after the country’s central bank lowered rates by 50 basis points as expected, citing continued progress towards stabilizing inflation, and the need to shore up economic growth.

Europe

European stocks were mixed on Wednesday ahead of the announcement of a government forecast that may show German GDP is set to contract in 2024.

Ahead of the revised economic forecast, German Finance Minister Christian Lindner has said the country’s economy is “treading water” and that the government “cannot be satisfied with economic development”.

The uncertainty arising from the Middle East conflict and caution ahead of the release of FOMC meeting minutes later in the day also weighed on markets.

The pan European STOXX 600 was marginally higher at 517.07 after falling 0.6 percent on Tuesday.

The German DAX was marginally lower, while France’s CAC 40 was little changed with a positive bias and the U.K.’s FTSE 100 rose 0.4 percent.

Volvo Car AB declined 1.4 percent. The company said as part of some organizational changes, its Chief Commercial Officer & Deputy CEO Björn Annwall will step down from his role.

Mondi, a packaging and paper group, jumped 3.3 percent in London after it agreed to acquire the Western European packaging assets of Schumacher Packaging for an enterprise value of 634 million euros.

CMC Markets surged nearly 5 percent. The provider of online financial trading and B2B institutional solutions reported that it expects a profit before tax in its first half, compared to last year’s loss, with higher operating income.

Nordex SE added 1.8 percent. The German wind turbine maker said that it has bagged orders for 1,726 MW wind turbines for the third-quarter, lesser than 2,251 MW of wind turbines, posted for the same period last year.

However, for the six-month period to September, the company secured orders for 5,083 MW wind turbines, higher than prior year’s 4,892 MW.

U.S. Economic Reports

Dallas Federal Reserve President Lorie Logan is scheduled to speak on the current state of the economy before the Future of Global Energy Conference presented by Shell USA, Inc. and co-hosted by the Greater Houston Partnership at 9:15 am ET.

At 10 am ET, the Commerce Department is due to release its report on wholesale inventories in the month of August. Wholesale inventories are expected to rise by 0.3 percent.

The Energy Information Administration is scheduled to release its report on crude oil inventories in the week ended October 4th at 10:30 am ET.

Crude oil inventories are expected to increase by 2.0 million barrels after jumping by 3.9 million barrels in the previous week.

Also at 10:30 am ET, Chicago Federal Reserve President Austan Goolsbee is due to give opening remarks before the Chicago Payments Symposium.

Richmond Federal Reserve President Thomas Barkin is also scheduled to speak before the Chicago Payments Symposium at 12:15 pm ET.

At 12:30 pm ET, Federal Reserve Vice Chair Philip Jefferson is due to speak on “The Discount Window, 1990-Present” before a Charlotte Economics Club Lunch.

The Treasury Department is scheduled to announce the results of this month’s auction of $39 billion worth of ten-year notes at 1 pm ET.

At 2 pm ET, the Federal Reserve is due to release the minutes of its latest monetary policy meeting.

Boston Federal Reserve President Susan Collins is scheduled to speak before the Worcester Regional Research Bureau 39th Annual Meeting at 5:30 pm ET.

At 6 pm ET, San Francisco Federal Reserve President Mary Daly is due to participate in a moderated conversation on monetary policy and the economic outlook at Boise State University.