U.S. Stocks May Extend Yesterday’s Rebound In Early Trading

Following the substantial rally seen over the course of the previous session, stocks are likely to see further upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 334 points.

The markets may continue to benefit from bargain hunting, as stocks remain at relatively reduced levels even after the rebound seen on Tuesday.

Optimism about a potential diplomatic solution to the ongoing Russia-Ukraine conflict may also generate additional buying interest.

Ukrainian President Volodymyr Zelenskyy said during an address to the nation that the positions in the negotiations were beginning to “sound more realistic,” while Russian Foreign Minister Sergey Lavrov told the BBC there was “some hope of reaching a compromise.”

Indications China is willing to provide more support for the slowing economy has also helped ease concerns about the global economic outlook.

Trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

With the Fed widely expected to raise interest rates by 25 basis points, traders will pay close attention to the accompanying statement for clues about future rate hikes.

On the U.S. economic front, the Commerce Department released a report showing a modest increase in retail sales in the month of February.

The Commerce Department said retail sales rose by 0.3 percent in February after soaring by an upwardly revised 4.9 percent in January.

Economists had expected retail sales to increase by 0.4 percent compared to the 3.8 percent spike originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales edged up by 0.2 percent in February after surging by 4.4 percent in January. Ex-auto sales were expected to advance by 0.9 percent.

A separate report from the Labor Department showed import prices in the U.S. increased by slightly less than expected in the month of February.

The report showed import prices jumped by 1.4 percent in February after surging by a downwardly revised 1.9 percent in January.

Economists had expected import prices to shoot up by 1.5 percent compared to the 2.0 percent spike originally reported for the previous month.

Meanwhile, the report showed export prices soared by 3.0 percent in February after leaping by a downwardly revised 2.8 percent.

Export prices were expected to jump by 1.6 percent compared to the 2.9 percent surge originally reported for the previous month.

Shortly after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of March. The housing market index is expected to edge down to 81 in March from 82 in February.

The Commerce Department is also due to release its report on business inventories in the month of January. Business inventories are expected to jump by 1.1 percent.

Stocks moved sharply higher over the course of the trading day on Tuesday, more than offsetting the weakness seen on Monday. The major averages all showed significant moves to the upside, with the tech-heavy Nasdaq showing a particularly strong rebound.

The major averages saw further upside in late-day trading, closing near their highs of the session. The Dow surged 599.10 points or 1.8 percent to 33,544.34, the Nasdaq soared 367.40 points or 2.9 percent to 12,948.62 and the S&P 500 spiked 89.34 points or 2.1 percent to 4,262.45.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Wednesday. Japan’s Nikkei 225 Index jumped by 1.6 percent, China’s Shanghai Composite Index spiked by 3.5 percent and Hong Kong’s Hang Seng Index skyrocketed by 9.1 percent.

The major European markets have also shown substantial moves to the upside on the day. While the U.K.’s FTSE 100 Index has shot up by 1.4 percent, the German DAX Index and the French CAC 40 Index are surging by 3.2 percent and 3.3 percent, respectively.

In commodities trading, crude oil futures are climbing $1.01 to $97.45 a barrel after plunging $6.57 to $96.44 a barrel a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,919.40, down $10.30 compared to the previous session’s close of $1,929.70. On Tuesday, gold tumbled $31.10.

On the currency front, the U.S. dollar is trading at 118.29 yen compared to the 118.30 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0985 compared to yesterday’s $1.1020.