Wednesday's early trading may witness a downward trend in stocks, following a significant drop during the prior session. Current indicators suggest a weak market opening, with S&P 500 futures depreciating by 0.2 percent.
This downward inclination may persist as markets anticipate the Federal Reserve's potential to postpone reductions in interest rates in light of recently published, optimistic US economic data. A report from ADP, a payroll processing firm, unveiled that private sector employment in the US outpaced expectations during March.
According to ADP, March saw an increase of 184,000 jobs in the private sector, following a revised upward climb of 155,000 jobs in February. The market had predicted an increase of about 148,000 jobs, compared to an initially reported 140,000 for the previous month. Furthermore, the report detailed a rapid accelerative growth in the annual pay rate for job shifters, registering a 10.0 percent rise in March.
“Inflation may be cooling off; however, our records show an upward trend in pay across goods and services sectors,” says ADP's chief economist, Nela Richardson. Concurrently, Treasury yields increased post-data release. The yield on the critical ten-year note expanded further after ending Tuesday's trading at a four-month closing high.
Shares of Intel (INTC) slumped significantly, which could further burden Wall Street. The semiconductor giant revealed a $7 billion operating loss in 2023 for its semiconductor manufacturing business, surpassing the preceding year's $5.2 billion operating loss, leading to a 5.2 percent plunge in pre-market trading.
Conversely, overall trading activity may remain relatively muted as investors await comments from Federal Reserve Chair Jerome Powell later in the day. The upcoming Institute for Supply Management's report on service sector activity for March could also impact trading trends.
Tuesday saw a significant downside trend in stocks, with the Dow and the S&P 500 retreating from record closing highs set last Thursday. The Dow dropped 396.61 points (1.0 percent) to 39,170.24, the Nasdaq declined 156.38 points (1.0 percent) to 16,240.45, and the S&P 500 dipped 37.96 points (0.7 percent) to 5,205.81.
Elsewhere, Wednesday's trading in the Asia-Pacific region depicted a mostly downward pattern. Japan's Nikkei 225 Index fell by 1.0 percent, and Hong Kong's Hang Seng Index declined by 1.2 percent. Europe's major markets displayed a mixed pattern; the UK's FTSE 100 Index dropped by 0.3 percent, while both the French CAC 40 Index and the German DAX Index gained 0.2 percent.
Crude oil futures are on the rise, gaining $0.71, to reach $85.86 a barrel. Gold is trading at $2,288.70 an ounce, after jumping $6.90. The US dollar is trading higher against the yen and the euro than at the close of New York trading on Tuesday.
