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 moving sharply lower in recent sessions.

The futures had been pointing an initial rebound on Wall Street but gave back ground following the release of a report from payroll processor ADP showing weaker than expected private sector job growth in the month of February.

ADP said private sector employment rose by 77,000 jobs in February after climbing by an upwardly revised 186,000 jobs in January.

Economists had expected private sector employment to grow by 140,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

Private sector job growth slowed to the lowest level since last July, with trade and transportation, health care and education, and information showing job losses, ADP said.

After moving sharply lower early in the session, stocks staged a valiant recovery attempt over the course of the trading day on Tuesday only to once again come under pressure going into the close.

The tech-heavy Nasdaq ended the day down 65.03 points or 0.4 percent at 18,285.16 after plunging by as much as 2.1 percent to a nearly five-month intraday low.

The S&P 500 briefly reached positive territory but closed down 71.57 points or 1.2 percent at a four-month closing low of 5,776.15. The Dow also slumped 670.25 points or 1.6 percent to 42,520.99.

The early sell-off on Wall Street came amid concerns about a global trade war after President Donald Trump’s new tariffs on imports from Canada, Mexico and China took effect.

While some traders used the weakness as an opportunity to pick up stocks at reduced levels, buying interest evaporated in the final hour of trading.

The White House said Trump is proceeding with implementing previously paused 25 percent tariffs on Canada and Mexico to combat the extraordinary threat to U.S. national security posed by unchecked drug trafficking.

Trump also increased the tariff on Chinese imports to 20 percent from 10 percent, claiming the country has not taken adequate steps to alleviate the illicit drug crisis.

Canada responded by announcing 25 percent retaliatory tariffs on C$155 billion of American goods, starting with tariffs on C$30 billion worth of goods immediately and tariffs on the remaining C$125 billion in 21 days’ time.

In a subsequent post on Truth Social, Trump said Canada putting a retaliatory tariff on the U.S. will lead to a reciprocal tariff by the same amount.

Meanwhile, Mexican President Claudia Sheinbaum said her government has made “contingency plans” to respond to the new tariffs.

China also said it would impose additional tariffs of 10 to 15 percent on several agricultural goods, including soybeans, corn, dairy and beef.

“Investors were desperately hoping that Trump would delay tariffs on Canada, Mexico and China at the eleventh hour, yet the US president has stuck to his guns and brought them into power,” said Russ Mould, investment director at AJ Bell.

“Naturally, the recipients have started to retaliate and that has raised the prospect of a full-blown trade war,” he added. “Investors knew there was a real chance this would happen but quietly hoped it would all go away and simply be Trump having a bark worse than his bite. Not this time around.”

Banking stocks turned in some of the market’s worst performances on the day, with the KBW Bank Index plunging by 4.6 percent to its lowest closing level in almost two months.

Substantial weakness was also visible among airline stocks, as reflected by the 3.9 percent nosedive by the NYSE Arca Airline Index. The index plummeted to a more than four-month closing low.

Brokerage stocks also showed a significant move to the downside, dragging the NYSE Arca Broker/Dealer Index down by 3.4 percent.

Steel, utilities and commercial real estate stock also ended the day notably lower, while some strength emerged among gold and semiconductor stocks.

Commodity, Currency Markets

Crude oil futures are tumbling $1.36 to $66.90 a barrel after slipping $0.11 to $68.26 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,918.80, down $1.80 compared to the previous session’s close of $2,920.60. On Tuesday, gold climbed $19.50.

On the currency front, the U.S. dollar is trading at 148.95 yen compared to the 149.79 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0716 compared to yesterday’s $1.0626.

Asia

Asian stocks ended mixed on Wednesday as the Trump administration indicated flexibility on some of its latest tariff measures against Canada and Mexico, and investors watched the latest developments of China’s annual political gathering.

The U.S. dollar remained fragile ahead of the release of ISM Services PMI and ADP Employment Change data for February.

Gold was marginally lower amid rising Treasury yields while oil extended losses for a third day on demand concerns.

China’s Shanghai Composite Index rose 0.5 percent to 3,341.96 as the government unveiled an annual economic growth target of around 5 percent and announced plans to boost domestic consumption and support the economy, given the broadening global uncertainty.

Hong Kong’s Hang Seng Index rallied 2.8 percent to 23,594.21 after Chinese Premier Li Qiang said the government will ramp up fiscal stimulus to guard its economy against changes “unseen in a century”.

The yuan weakened slightly as China boosted its budget deficit to the highest in 30 years.

Japanese markets edged up slightly after a choppy session. The Nikkei 225 Index rose 0.2 percent to 37,418.24 as traders weighed Beijing’s economic plans, Germany’s increased defense spending and upbeat service sector activity data for February.

Meanwhile, Bank of Japan Deputy Governor Shinichi Uchida signaled further rate hikes, citing inflation and wage growth. The broader Topix Index closed up 0.3 percent at 2,718.21. Hyundai Motor, Kia and SK Hynix surged 2-4 percent.

Seoul stocks rose sharply, with the Kospi surging 1.2 percent to 2,558.13 to snap a three-day losing streak.

Australian markets fell despite GDP rising more than expected in the fourth quarter. The benchmark S&P/ASX 200 Index dropped 0.7 percent to 8,141.10 after Trump defended reciprocal tariffs in his address to Congress.

The broader All Ordinaries Index settled 0.7 percent lower at 8,363.10, with banks, consumer staples and energy stocks leading losses.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index fell 0.5 percent to 12,412.07.

Europe

European stocks have rallied on Wednesday as German leaders agreed to loosen the country’s so-called debt brake and China ramped up stimulus to guard its economy from changes “unseen in a century.”

Investors were also reacting to comments from U.S. Commerce Secretary Howard Lutnick that President Donald Trump will “probably” announce a deal to reduce tariffs on Canada and Mexico.

The German DAX Index has surged by 3.5 percent, the French CAC 40 Index has jumped by 2.1 percent and the U.K.’s FTSE 100 Index has climbed by 0.4 percent.

Construction firms and arms makers have jumped in Germany as CDU leader Friedrich Merz unveiled plans for a €500 billion special fund to bolster the nation’s infrastructure and defense spending.

Online sports betting and gaming company Flutter Entertainment has also advanced as its fourth quarter earnings beat estimates.

Chemicals giant Bayer has also moved sharply higher as it raised the prospect of a return to earnings growth next year.

Beazley has also surged after the British insurer reported record profit before tax of $1.423 billion for full year 2024.

Meanwhile, Balfour Beatty has slumped. The international infrastructure group announced that Leo Quinn will step down from the Board later this year.

French reinsurer SCOR SE has also declined as it posted a P&C combined ratio of 83.1 percent for the fourth quarter, a deterioration of 7.5 points from the fourth quarter of 2023.

Schaeffler AG has also moved to the downside after the German machine and car parts maker gave a gloomy outlook for 2025.

Adidas has also tumbled. The sportswear firm said it expects slightly slower sales growth of up to 10 percent this year after a strong 2024.

U.S. Economic News

A report released by payroll processor ADP on Wednesday showed private sector employment in the U.S. increased by much less than expected in the month of February.

ADP said private sector employment rose by 77,000 jobs in February after climbing by an upwardly revised 186,000 jobs in January.

Economists had expected private sector employment to grow by 140,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

Private sector job growth slowed to the lowest level since last July, with trade and transportation, health care and education, and information showing job losses, ADP said.

At 10 am ET, the Institute for Supply Management is due to release its report on service sector activity in the month of February. The ISM’s services PMI is expected to inch up to 52.9 in February after dipping to 52.8 in January, with a reading above 50 indicating growth.

The Commerce Department is also scheduled to release its report on new orders for manufactured goods in the month of January at 10 am ET. Factory orders are expected to jump by 1.6 percent in January after slumping by 0.9 percent 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 28th. Crude oil inventories are expected to edge down by 0.3 million barrels after falling by 2.3 million barrels in the previous week.

The Federal Reserve is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, at 2 pm ET.