Stock futures pointed to a modestly lower open on Wednesday, in a signal that investors remain fidgety. The market’s resilience will be tested as uncertainty over next week’s Federal Reserve decision intensifies. Stock-specific moves could lend some support to the broader market, although the overall sentiment is likely to be one of caution.
Cues From Tuesday’s Trading:
Stocks ended Tuesday’s lackluster session slightly higher amid a lack of any major trading catalyst. Bond yields slipped amid worries concerning the economy’s trajectory.
After opening lower and trading in the red until late morning trading, the major averages diverged. The Dow Industrials languished below the unchanged line for the better part of the session before sneaking above the mark in the final few minutes of trading. On the other hand, the S&P 500 Index and the Nasdaq Composite hovered mostly above the flat line before ending higher.
The Nasdaq Composite ended at its highest level since April 20, 2022, and the S&P 500 Index settled at nearly a 10-month high.
Among the sectors, financial and consumer discretionary stocks gained ground in the session. On the other hand, healthcare and consumer staple stocks moved to the downside.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | +0.36% | 13,276.42 | |
| S&P 500 Index | +0.24% | 4,283.85 | |
| Dow Industrials | +0.03% | 33,573.28 |
Analyst Color:
The recent market advance has made LPL Financial chief technical strategist Adam Turnquist wary. While noting that the stocks have had a nice run, the analyst said at higher prices, the bar for further gains gets higher.
“With stocks at higher valuations, high-quality bonds offering attractive yields, an S&P 500 Index with concentrated leadership facing technical resistance at 4,300, and an elevated risk of a late-2023 recession, we think it makes sense to be a bit careful here,” he said.
The analyst said he is neutral on equities.
Futures Today
| Index | Performance (+/-) | |
|---|---|---|
| Nasdaq 100 Futures | +0.02% | |
| S&P 500 Futures | +0.04% | |
| Dow Futures | -0.05% | |
| R2K Futures | -0.03% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) edged up 0.07% to $428.32 and the Invesco QQQ ETF(NASDAQ:QQQ) rose 0.03 at $354.95, according to Benzinga Pro data.
Upcoming Economic Data:
The Mortgage Bankers Association is scheduled to release the weekly mortgage application volume data at 7 a.m. EDT. Mortgage application volume for the week ended May 26 fell a seasonally adjusted 3.7% from the previous week. The 30-year mortgage rates were trending at a weekly average of 6.9%, the highest since November.
The Commerce Department will release the trade balance report for April at 8:30 a.m. EDT. Economists, on average, expect a wider trade deficit of $75.2 billion compared to the March deficit of $64.2 billion.
The Energy Information Administration is set to release its weekly petroleum status report at 10:30 a.m. EDT.
The Federal Reserve is due to release its consumer credit report for April at 3 p.m. EDT. The consensus estimate calls for a decline in the outstanding consumer credit to $22 billion from March’s $26.51 billion.
See also: How To Trade Futures
Stocks In Focus:
- Coinbase Global, Inc. (NYSE:COIN) shares rose about 1.75% in premarket trading as they rebounded after Tuesday’s plunge triggered by an SEC lawsuit against the cryptocurrency exchange.
- Yext, Inc. (NYSE:YXT) rallied over 14% following the release of the company’s quarterly results.
- Tesla, Inc. (NASDAQ:TSLA) gained over 2.50%, as its recent momentum continues unabated.
- Campbell Soup Co. (NYSE:CPB), United Natural Foods, Inc. (NYSE:UNFI), GameStop Corp. (NYSE:GME), Smartsheet, Inc. (NYSE:SMR) and Oxford Industries, Inc. (NYSE:OXM) are among the notable companies reporting earnings on Wednesday.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures climbed 0.99% to $72.45 a barrel in early European trading on Wednesday, reversing from Tuesday’s 0.57% pullback.
The yield on the benchmark 10-year Treasury note fell 0.017 percentage points to 3.683%.
The major Asian markets closed Wednesday’s session on a mixed note, with Hong Kong, Indian and Taiwanese markets advancing strongly. The sentiment was mixed in China, while most other markets retreated. Trade balance data from China showed a smaller surplus for May, as exports fell at a faster-than-expected year-over-year pace. In other key data from the region, Australia’s GDP growth came in below estimates in the first quarter.
European stocks were trading mixed in late-morning trading on Wednesday.
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