U.S. Stocks May Regain Ground Following Recent Weakness

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to regain ground after moving sharply lower over the past several sessions.

Bargain hunting may contribute to initial strength on Wall Street following the recent pullback, which saw the Nasdaq and the S&P 500 close lower for four straight sessions.

The tech-heavy Nasdaq tumbled to its lowest closing level in three months on Tuesday, while the S&P 500 fell to a one-month closing low.

Overall trading activity may be somewhat subdued, however, as traders await earnings news from AI darling and market leader Nvidia (NVDA).

Nvidia, which is due to report its fourth quarter results after the close of today’s trading, is jumping by 2.7 percent in pre-market trading after moving sharply lower over the past few sessions.

“Nvidia is due to report its fourth-quarter and full-year results on Wednesday and investors will be looking forward to the usual demolition of forecasts and also positive guidance for the next quarter from chief executive Jensen Huang,” said AJ Bell investment director Russ Mould.

“Failure to deliver the customary upside surprise might not sit well,” he added. “Nvidia’s shares are no higher than they were last summer, despite strong earnings and ongoing investor enthusiasm for all things related to artificial intelligence, so any unexpected disappointment could cause some share price turbulence.”

After moving sharply lower early in the session, stocks regained some ground over the course of the trading day on Tuesday but remained firmly negative. With the continued weakness, the Nasdaq and the S&P 500 closed lower for the fourth straight session.

The Nasdaq plunged 260.54 points or 1.4 percent to a three-month closing low of 19,026.39 and the S&P 500 slid 28.00 points or 0.5 percent to a one-month closing low of 5,955.25, although the narrower Dow bucked the downtrend and climbed 159.95 points or 0.4 percent to 43,621.16.

Significant weakness among technology stocks weighed on Wall Street, as reflected the notable slump by the tech-heavy Nasdaq.

Traders continued to express concerns about the sustainability of the artificial intelligence trade, with AI darling Nvidia tumbling by 2.8 percent ahead of the release of its fourth quarter results after the close of trading on Wednesday.

The selling pressure also came amid concerns about the outlook for the economy following the release of a Conference Board report showing a significant deterioration by U.S. consumer confidence in the month of February.

The Conference Board said its consumer confidence index plunged to 98.3 in February from an upwardly revised 105.3 in January.

Economists had expected the consumer confidence index to dip to 103.0 from the 104.1 originally reported for the previous month.

Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, noted the consumer confidence index saw its largest monthly decline since August 2021.

“This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022,” said Guichard. “Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly.”

She added, “Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs.”

Semiconductor stocks showed a substantial move to the downside on the day, with the Philadelphia Semiconductor Index tumbling by 2.3 percent.

Computer hardware and software stocks also saw considerable weakness, contributing to the steep drop by the tech-heavy Nasdaq.

A sharp pullback by the price of gold also weighed on gold stocks, resulting in a 1.6 percent drop by the NYSE Arca Gold Bugs Index.

Notable weakness was also visible among oil, financial and airline stocks, while housing and pharmaceutical stocks showed strong moves to the upside.

Commodity, Currency Markets

Crude oil futures are edging down $0.03 to $68.90 a barrel after plunging $1.77 to $68.93 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,924.50, up $5.70 compared to the previous session’s close of $2,918.80. On Tuesday, gold dove $44.40.

On the currency front, the U.S. dollar is trading at 149.45 yen compared to the 149.03 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0487 compared to yesterday’s $1.0514.

Asia

Asian markets ended mixed on Wednesday as inflation and trade war fears offset Chinese AI optimism. Tariff worries prevailed as U.S. President Donald Trump ordered a probe into potential tariffs on copper imports to boost U.S. production of the critical metal.

Treasury yields rebounded but the dollar remained undermined by growth worries. Gold lingered near one-week lows despite rising bets on earlier Fed rate cuts.

Oil bounced off two-month lows after the American Petroleum Institute reported U.S. crude stockpiles fell last week.

If confirmed by the EIA later in the day, it would mark the first decline in U.S. crude oil inventories since mid-January.

China’s Shanghai Composite Index jumped 1.0 percent to 3,380.21 following Morgan Stanley’s upbeat price target revisions for major Chinese banks amid stabilizing credit risks.

Hong Kong’s Hang Seng Index surged 3.3 percent to 23,787.93 on optimism fueled by AI activity and China’s efforts to enhance support for the private sector after years of crackdowns.

E-commerce giant Alibaba spiked 4.8 percent after unveiling a public AI model for video and image creation.

Food delivery company Meituan soared 9.8 percent, gaming and technology company Tencent Holdings climbed 3.4 percent and search engine Baidu rose 3.3 percent.

Japanese markets cut early losses to end modestly lower as the yen eased from a four-and-a-half-month high reached in the previous session on worries about the U.S. economic outlook and growing expectations that the Bank of Japan will continue raising interest rates this year.

The Nikkei 225 Index fell over 1 percent to touch a four-month low before ending off the day’s lows at 38,142.37, down 0.3 percent from its previous close.

Seoul stocks eked out modest gains, with the Kospi rising 0.4 percent to 2,641.09 – snapping a two-day losing streak.

Tech stocks ended mixed ahead of Nvidia’s fourth-quarter earnings release. Samsung Electronics fell over 1 percent, while SK Hynix jumped 1.3 percent.

Australian markets ended slightly lower, with mining and gold stocks leading losses. The benchmark S&P/ASX 200 Index slipped 0.1 percent to 8,240.70, while the broader All Ordinaries index settled 0.2 percent lower at 8,477.30.

Engineering group Worley jumped 10.3 percent after reporting a 55.4 percent increase in first-half net profit and unveiling a $500 million share buyback.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rallied 1.2 percent to 12,452.46 after six straight sessions of losses.

Europe

European shares have moved notably higher on Wednesday after the United States and Ukraine agreed on the terms of a draft minerals deal amid ongoing talks to end the Ukraine-Russia war.

The draft minerals deal to turn over Kyiv’s revenue from some of its mineral resources to Washington says that the United States wants Ukraine to be “free, sovereign and secure.” The deal is key for Ukraine in securing continued U.S. support for its fight against Russia.

The agreement could be signed as early as Friday, when Ukrainian President Volodymyr Zelensky visits Washington to meet his American counterpart.

The German DAX Index is up by 1.7 percent, the French CAC 40 Index is up by 1.4 percent and the U.K.’s FTSE 100 Index is up by 0.7 percent.

Investors shrugged off the latest survey data showing German consumer sentiment is set to fall in March on weaker income expectations and willingness to buy.

The forward-looking consumer sentiment index unexpectedly fell to -24.7 in March from -22.6 in February, according to the survey jointly published by the market research group GfK and the Nuremberg Institute for Market Decisions. The reading was expected to improve to -21.6.

In corporate news, Anheuser-Busch InBev has soared as the world’s largest brewer reported forecast-beating fourth quarter profits.

Munich Re has also surged as the reinsurance giant reported a net profit of €5.7 billion for 2024, surpassing its original €5 billion target.

Healthcare group Fresenius has also soared after reporting fourth quarter adjusted operating profit above market estimates.

E.ON, the operator of energy networks, has also shown a strong move to the upside after upgrading its mid-term outlook.

Staffing firm Adecco has also jumped after saying it was seeing signs of an uptick in the global hiring market at the start of the year.

Meanwhile, auto giant Stellantis has moved sharply lower after predicting no major improvement in its profitability in 2025.

German telecommunications firm Deutsche Telekom has also tumbled as it forecast profit for 2025 below analysts’ estimates.

Biotechnology firm Evotec has also moved to the downside after announcing a change in its management board.

U.S. Economic News

The Commerce Department is scheduled to release its report on new home sales in the month of January at 10 am ET. New home sales are expected to tumble 2.6 percent to an annual rate of 680,000 in January after surging 3.6 percent to an annual rate of 698,000 in December.

At 10:30 am ET, the Energy Information Administration is due to release its report on oil inventories in the week ended February 21st. Crude oil inventories are expected to increase by 2.3 million barrels after jumping by 4.6 million barrels in the previous week.

Atlanta Federal Reserve President Raphael Bostic is scheduled to participate in a conversation on the economic outlook and housing before the Urban Land Institute’s annual Housing Opportunity Conference at 12 pm ET.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $70 billion worth of seven-year notes.