U.S. Stocks May Lack Direction In Early Trading

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 ending the previous session mixed.

U.S. stocks closed mixed on Tuesday after a cautious session, as investors looked ahead to the release of some crucial U.S. data, including a report on consumer income and spending, for more clarity about the outlook for Federal Reserve’s interest rates.

Among the major averages, the Dow settled with a loss of 299.05 points or 0.76 percent, at 39,112.16. The Nasdaq climbed up 220.84 points or 1.26 percent, to 17,717.65, while the S&P 500 ended up by 21.43 points or 0.39 percent, at 5,469.30.

Nvidia rallied nearly 7 percent, rebounding after recent losses. Meta Platforms, Alphabet, Apple Inc., Eli Lilly, Micron Technology, Uber Technologies, Arista Networks, Palo Alto Networks, Dell, and Airbnb also posted strong gains.

Boeing, Nike, Goldman Sachs, IBM, Pfizer, McDonalds Corporation, Wells Fargo, Bank of America, Home Depot and Johnson & Johnson declined sharply.

Walmart ended lower by more than 2 percent, after the company’s CFO flagged the second quarter as the “most challenging quarter”.

On the economic front, the Chicago Fed’s measure of overall economic activity and related inflationary pressure in the United States rose in May for the first time in three months, survey results showed.

The Chicago Fed National Activity Index, or CFNAI, rose to +0.18 in May from -0.26 in April, which was revised from -0.23.

U.S. house prices rose less than expected in April, after stagnating in the previous month, latest data from the Federal Housing Financing Agency showed.

The seasonally adjusted house price index increased 0.2 percent from the previous month. Economists had forecast a 0.3 percent gain. March’s 0.1 percent increase was revised down to 0.0 percent.

House prices rose 6.3 percent year-on-year in April, which was more than double the 3.1 percent gain registered in the same month last year.

Survey data from the Conference Board showed consumer confidence in the U.S. eased slightly in June as households’ economic expectations eroded. The Conference Board Consumer Confidence Index fell to 100.4 from 101.3 in May. Economists had expected a reading of 100.

The Expectations Index, which mirrors consumers’ short-term outlook for income, business, and labor market conditions, slid to 73.0 from 74.9 in May.

Commodity, Currency Markets

Crude oil futures are climbing $0.56 to $81.39 a barrel after falling $0.80 to $80.83 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,328.70, down $2.10 compared to the previous session’s close of $2,330.80. On Tuesday, gold slid $13.60.

On the currency front, the U.S. dollar is trading at 160.32 yen compared to the 159.70 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0682 compared to yesterday’s $1.0714.

Asia

Asian stocks ended mostly higher on Wednesday as a rebound in tech stocks helped offset hawkish comments from Federal Reserve officials.

Amid much uncertainty about the interest-rate outlook, investors braced for the release of key U.S. inflation reading, due later this week for directional cues.

Federal Reserve governor Michelle Bowman has warned of upside risks to the inflation outlook and reiterated the need to keep borrowing costs elevated “for some time”.

Her counterpart Lisa Cook said that the timing of any rate adjustment will depend on how economic data evolve and what they imply for the economic outlook and balance of risks.

The dollar edged higher amid anxiety over upcoming French elections and escalating tensions in the Middle East.

Gold edged lower on dollar strength while oil prices rose despite industry data showing a surprise jump in U.S. stockpiles.

Chinese markets recovered from an early slide to end notably higher.

The benchmark Shanghai Composite index rose 0.76 percent to 2,972.53 while Hong Kong’s Hang Seng index ended marginally higher at 18,089.93.

Japanese markets led regional gains as tech stocks tracked their U.S. peers higher. The Nikkei average closed up 1.26 percent at 39,667.07, after having reached its highest level since April 12 earlier.

The broader Topix index settled 0.56 percent higher at 2,802.95. The dollar traded near the 160-yen mark amid speculation the Bank of Japan could hike rates and outline major cuts to its bond-buying program in July.

Advantest, which counts Nvidia among its customers, soared 7 percent. Tokyo Electron rallied 3.6 percent and Screen Holdings added 2.1 percent.

Seoul stocks advanced, driven by gains in the tech sector. The Kospi average added 0.64 percent to close at 2,792.05.

Chipmaker SK Hynix surged 5.3 percent and Hanmi Semiconductor rallied 4 percent, buoyed by a rally in tech stocks on Wall Street overnight.

Australian markets fell notably after data showed consumer inflation in the country rose to a six-month high in May, increasing the odds of an RBA rate hike in August.

The benchmark S&P/ASX 200 dropped 0.71 percent to 7,783, dragged down by mining and financial stocks. The broader All Ordinaries index finished 0.67 percent lower at 8,022.90.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index rallied 1.01 percent to 11,835.02.

Europe

European stocks were moving higher on Wednesday as a rebound in tech stocks on Wall Street overnight outweighed hawkish comments from Federal Reserve officials.

Investors also shrugged off the results of a closely watched survey that showed German consumer confidence is set to deteriorate in July as the economy struggles to gain momentum.

After rising for four straight months, the consumer climate index dropped unexpectedly to -21.8 in July from -21.0 in June, the survey published jointly by GfK and the Nuremberg Institute for Market Decisions showed. The score was forecast to climb to -19.4.

Amid much uncertainty about the interest-rate outlook, investors braced for the release of key U.S. inflation reading, due later this week for further direction.

The pan European STOXX 600 rose 0.4 percent to 519.62 after falling 0.2 percent on Tuesday.

The German DAX climbed 0.7 percent, France’s CAC 40 added 0.2 percent and the U.K.’s FTSE 100 was up half a percent.

Eurozone bond yields continued to advance due to political uncertainty resulting from changes in the partisan landscape in the region.

In corporate news, Gelion shares surged 31 percent in London after the Anglo-Australian battery innovator said it has signed a Joint Development Agreement with Glencore International AG, a diversified resource company.

Miners Anglo American, Antofagasta, BHP and Glencore rose 1-2 percent.

Oil & gas giant BP Plc rose 0.7 percent and Shell edged up 0.3 percent as oil prices rose despite industry data showing a small build in U.S. crude inventories.

Meal delivery company Deliveroo rallied 3.6 percent after reports of takeover interest from U.S. rival DoorDash.

Checkit, an augmented workflow and smart sensor automation company, fell 2.4 percent after it decide not to make an offer to acquire Crimson Tide.

Volkswagen fell 1.5 percent after the German automaker announced $5 billion investment in Rivian, the American EV maker, in a joint venture.

U.S. Economic Reports

The Commerce Department is scheduled to release its report on new home sales in the month of May at 10 am ET. Economists expect new home sales to rise to an annual rate of 640,000 in May after tumbling to a rate of 634,000 in April.

At 10:30 am ET, the Energy Information Administration is due to release its report on oil inventories in the week ended June 21st.

Crude oil inventories are expected to decrease by 3.0 million barrels after falling by 2.5 million barrels in the previous week.

The Treasury Department is scheduled to announce the results of this month’s auction of $70 billion worth of five-year notes at 1 pm ET.