Tech Stocks May Lead Early Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Wednesday, with stocks likely to give back ground after ending the previous session mostly higher.

Tech stocks may lead an early pullback on Wall Street amid a negative reaction to earnings news from Alphabet (GOOGL) and Advanced Micro Devices (AMD).

Shares of Alphabet are tumbling by 7.6 percent in pre-market trading after the Google parent reported better than expected fourth quarter earnings but its cloud revenues missed estimates.

Chip maker AMD is also plunging by 9.9 percent in pre-market trading after reporting fourth quarter earnings and revenues that beat estimates but its data center sales fell short of expectations.

Shares of Disney (DIS) are also seeing pre-market weakness after the entertainment giant reported better than expected fiscal first quarter earnings but warned it expects a “modest decline” in Disney+ subscribers in the current quarter.

Worries about the Federal Reserve leaving interest rates on hold for a prolonged period may also weigh on stocks after payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of January.

ADP said private sector employment climbed by 183,000 jobs in January after rising by an upwardly revised 176,000 jobs in December.

Economists had expected private sector employment to rise by 150,000 jobs compared to the addition of 122,000 jobs originally reported for the previous month.

Stocks moved mostly higher during trading on Tuesday, largely offsetting the weakness seen in the previous session. The major averages all moved to the upside on the day, with the tech-heavy Nasdaq leading the charge.

The major averages finished the session just off their best levels of the day. The Nasdaq jumped 262.06 points or 1.4 percent to 19,654.02, the S&P 500 climbed 43.31 points or 0.7 percent to 6,037.88 and the Dow rose 134.13 points or 0.3 percent to 44,556.04.

The strength on Wall Street partly reflected easing concerns about a global trade war after President Donald Trump agreed to pause 25 percent tariffs on imports from Mexico and Canada for a month.

Positive sentiment may also have been regenerated in reaction to a report from the Labor Department showing job openings in the U.S. fell by much more than expected in the month of December.

The report said job openings tumbled to 7.6 million in December after climbing to an upwardly revised 8.2 million in November.

Economists had expected job openings to dip to 8.0 million from the 8.1 million originally reported for the previous month.

The data led to some optimism about the outlook for interest rates ahead of the release of the Labor Department’s more closely watched monthly jobs report on Friday.

Meanwhile, traders largely shrugged off news that China has slapped retaliatory tariffs on U.S. imports in response to a 10 percent trade duty imposed on Chinese goods.

China’s Finance Ministry said it will impose a 15 percent duty on imports of coal and liquefied natural gas from the U.S.

In addition, there will be a 10 percent tariff on imports from the U.S. of crude oil, agricultural equipment and automobiles beginning February 10.

Oil stocks moved sharply higher despite a decrease by the price of crude oil, resulting in a 3.0 percent surge by the NYSE Arca Oil Index.

Considerable strength was also visible among computer hardware stocks, as reflected by the 2.5 percent jump by the NYSE Arca Computer Hardware Index.

Steel, retail and networking stocks also saw significant strength on the day, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are sliding $0.84 to $71.86 a barrel after falling $0.46 to $72.70 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,889.20, up $13.40 compared to the previous session’s close of $2,875.80. On Tuesday, gold climbed $18.70.

On the currency front, the U.S. dollar is trading at 152.96 yen compared to the 154.34 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0412 compared to yesterday’s $1.0379.

Asia

Asian shares ended mixed on Wednesday as tariff worries persisted and a private survey showed Chinese services activity expanded at a slower pace in January. Disappointing earnings updates from Google parent Alphabet and AMD also kept investors on tenterhooks.

China’s central bank set a stronger-than expected fixing rate for the yuan against the U.S. dollar, contrary to expectations that the People’s Bank of China will set a lower rate for the yuan this year to mitigate the impact of new U.S. tariffs on Chinese exporters.

The Japanese yen jumped as upbeat wage and services PMI data raised expectations for more BoJ rate hikes this year.

Gold prices hit a new record high amid rising U.S.-China trade tensions and ahead of key U.S. economic data, including the payrolls report due on Friday, which could shed more light on the health of the U.S. economy.

Oil extended losses as OPEC+ plans to gradually increase oil output from April added uncertainty to global energy markets.

China’s Shanghai Composite Index fell 0.7 percent to 3,229.49 on escalating trade tensions, with the U.S. Postal Service announcing a temporary suspension of parcel shipments from China and Hong Kong.

Hong Kong’s Hang Seng Index tumbled 0.9 percent to 20,597.09, with real estate and tech stocks leading losses.

Japanese stocks ended slightly higher as export-linked stocks advanced despite a stronger yen. The Nikkei 225 Index inched up 0.1 percent to 38,831.48 after a choppy session. The broader Topix Index settled 0.3 percent higher at 2,745.51.

Media technology conglomerate SoftBank Group advanced 1.5 percent. Toyota rallied 3.1 percent after raising its full year profit outlook. Nintendo gained 2.9 percent after announcing it has no plans to abandon its original Nintendo Switch console.

Honda Motor surged 8.2 percent, while Nissan slumped 4.9 percent after reports that the management integration talks between the companies could be terminated.

Seoul shares closed sharply higher, with the Kospi jumping 1.1 percent to 2,509.27. Traders shrugged off data that showed South Korean consumer inflation quickened to a six-month high in January.

Australian markets advanced, led by mining and gold-linked stocks after China’s measured response to U.S. tariffs.

The benchmark S&P/ASX 200 Index rose 0.5 percent to 8,416.90, while the broader All Ordinaries Index ended 0.6 percent higher at 8,683.40.

Wealth manager Insignia Financial soared 6.9 percent as Brookfield Asset Management matched rival bids in the high stakes battle for the company.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index dropped 0.5 percent to 12,844.59 after data showed the country’s jobless rate rose to a four-year high at the end of last year.

Europe

European shares are turning in a lackluster performance on Wednesday as tech stocks declined, offsetting gains in the healthcare and financial sectors.

In economic news, private sector activity in the euro area rose in January, S&P Global said in a report. The composite Purchasing Managers’ Index (PMI) inched up to 50.2 from 49.6 in December.

While the U.K.’s FTSE 100 Index is up by 0.2 percent, the German DAX Index is just below the unchanged line and the French CAC 40 Index is down by 0.2 percent.

Chip equipment maker ASML and Infineon Technologies have fallen after Advanced Micro Devices reported 2024 data center sales that fell short of expectations.

Wind turbine maker Vestas has also shown a notable move to the downside as it warned of ongoing uncertainty for 2025.

Danish jewelry maker Pandora has also slumped after cautioning that organic growth this year would be lower than last.

Meanwhile, U.K.-based publishing company Future Plc has moved sharply higher in London after backing guidance for FY25.

GSK has also soared. The pharmaceutical giant reported robust 2024 performance and lifted its long-term sales outlook.

French oil major TotalEnergies has also risen percent. The company raised its dividend and maintained the pace of share buybacks despite reporting a drop in fourth-quarter earnings.

Lender Credit Agricole has also jumped as it reported better-than-expected earnings on higher revenue in the final quarter of 2024.

Spanish lender Banco Santander has also shown a strong move to the upside after attributable 2024 profit rose 14 percent from last year.

Pharmaceutical behemoth Novo Nordisk has also surged after its fourth quarter earnings topped expectations.

U.S. Economic News

Payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. increased by more than expected in the month of January.

ADP said private sector employment climbed by 183,000 jobs in January after rising by an upwardly revised 176,000 jobs in December.

Economists had expected private sector employment to rise by 150,000 jobs compared to the addition of 122,000 jobs originally reported for the previous month.

A separate report released by the Commerce Department on Wednesday showed the U.S. trade deficit widened significantly in December, as imports surged and exports plunged.

The Commerce Department said the trade deficit spiked to $98.4 billion in December from a revised $78.9 billion in November.

Economists had expected the trade deficit to jump to $96.6 billion from the $78.2 billion originally reported for the previous month.

The substantial increase in the size of the trade deficit came as the value of imports shot up by 3.5 percent to $364.9 billion, while the value of exports tumbled by 2.6 percent to $266.5 billion.

At 10 am ET, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of January. The ISM’s services PMI is expected to inch up to 54.3 in January after rising to 54.1 in December, with a reading above 50 indicating growth.

The Energy Information Administration is due to release its report on oil inventories in the week ended January 31st at 10:30 am ET.

Crude oil inventories are expected to increase by 3.2 million barrels after climbing by 3.5 million barrels in the previous week.

At 3 pm ET, Federal Reserve Governor Michelle W. Bowman is scheduled to deliver a speech on Bank Regulation at the 2025 Kansas Bankers Association Harold A. Stones Government Relations Conference.

Federal Reserve Vice Chair Philip N. Jefferson is due to deliver a lecture on “Do Non-Inflationary Economic Expansions Promote Shared Prosperity?” at Swarthmore College in Swarthmore, Pennsylvania, at 7:30 pm ET.