The futures for major U.S. indexes suggest a lackluster start for Wednesday's trading session, with stocks likely to exhibit indecision following the notable gains achieved the previous day. Investors appear hesitant to embark on significant market moves as they await the release of the Federal Reserve's latest monetary policy meeting minutes scheduled for later today.
The minutes from the Fed's September gathering, where the central bank reduced interest rates by 50 basis points, could offer insight into future rate trajectories. Upcoming reports on consumer and producer price inflation could further illuminate how assertively the Fed might lower rates in the subsequent months.
U.S. stocks saw an upward trend on Tuesday, particularly in the technology sector. Overlooking geopolitical tensions and uncertainties surrounding interest rates, traders focused on the ongoing earnings season. The primary indexes closed strongly, though the Dow commenced the day sluggishly before rallying in the latter stages, ultimately closing with a 126.13 point rise, or 0.3%, ending at 42,080.37.
The S&P 500 finished at 5,751.13, up 55.19 points or 1.0%, while the Nasdaq appreciated by 259.01 points or 1.5% to close at 18,182.92. Notable gainers included Travelers Companies Inc., Honeywell, Apple, Home Depot, Amazon, Microsoft, and Salesforce, each advancing between 1 and 2%.
The Nasdaq's leading gainer was Palo Alto Networks, which surged nearly 5%. NVIDIA increased by 3.7%, and Synopsys climbed 3.2%. CoStar Group, Netflix, Broadcom, Autodesk, Cadence, Airbnb, Booking Holdings, and Adobe rose 2 to 3%. PepsiCo advanced approximately 2%, reporting third-quarter earnings of $2.930 billion, or $2.13 per share, surpassing Wall Street estimates, despite a decline from last year's $3.092 billion, or $2.24 per share.
In contrast, ExxonMobil, Valero Energy, Marathon Petroleum Corporation, Super Micro Computer, Caterpillar, Chevron, and American Express were among the notable decliners.
On the economic landscape, the U.S. trade deficit diminished to $70.4 billion in August 2024, marking a five-month low from a revised $78.9 billion in July. Exports rose by 2% to a record $271.8 billion, while imports decreased by 0.9% to $342.2 billion.
Turning to commodity and currency markets, crude oil futures are down $0.11 to $73.46 per barrel following a $3.57 drop to $73.57 on Tuesday. Gold is slightly down to $2,634.80 an ounce, shedding $0.60 from the previous close as it had plunged $30.60 on Tuesday. The U.S. dollar currently trades at 148.85 yen, up from 148.20 yen at Tuesday's New York close. Against the euro, the dollar stands at $1.0955, slightly depreciating from yesterday's $1.0980.
In Asia, stock markets displayed mixed outcomes as the rally prompted by China's stimulus dissipated due to ongoing Middle Eastern conflicts and anticipation of U.S. economic indicators. The dollar remained stable following a significant rally, while gold prices eased and oil prices recuperated some losses after shedding over 4% amid potential Hezbollah-Israel ceasefire developments.
Chinese equities fell sharply, with the Shanghai Composite Index dropping 6.6% to 3,258.86 as profit-taking ensued amid waning confidence in economic stimulus efforts. Hong Kong's Hang Seng Index fluctuated before closing 1.4% lower at 20,637.24 following reports of an upcoming fiscal policy briefing from China's finance ministry.
In Japan, markets rallied as tech stocks mirrored gains from U.S. counterparts. The Nikkei 225 Index increased by 0.9% to 39,277.96, and the Topix Index rose 0.3% to 2,707.24. Notable performers included Advantest, soaring 3.7%, Tokyo Electron advancing 1.2%, and SoftBank Group climbing 1.3%. Seven & I Holdings surged 4.7% after an improved acquisition offer from Canada's Alimentation Couche-Tard. Fast Retailing, anticipating earnings announcements, rose 1.1%. South Korean markets were closed for a public holiday.
In Australia, markets inched upward, supported by a third consecutive session of gains in the banking sector, which offset losses in mining and energy stocks. The S&P/ASX 200 Index edged up 0.1% to 8,187.40, while the All Ordinaries Index ended 0.2% higher at 8,456.80.In New Zealand, the benchmark S&P/NZX-50 Index gained 1.8%, reaching 12,776.13. The surge followed the central bank's decision to cut interest rates by 50 basis points, an anticipated move aimed at stabilizing inflation and bolstering economic growth.
In Europe, stock markets presented a mixed picture on Wednesday, as attention turned to a forthcoming government forecast that may indicate a contraction in Germany's GDP for 2024. Ahead of the forecast, German Finance Minister Christian Lindner described the economy as "treading water," expressing dissatisfaction with its current trajectory.
Market sentiment was further dampened by uncertainty stemming from the conflict in the Middle East and investor caution prior to the release of the Federal Open Market Committee (FOMC) meeting minutes.
The pan-European STOXX 600 index experienced a slight uptick to 517.07, recovering from a 0.6% decline on Tuesday. In individual markets, Germany's DAX edged slightly lower, while France's CAC 40 showed minimal change with a slight upward tendency. Meanwhile, the U.K.'s FTSE 100 rose by 0.4%.
Volvo Car AB shares fell by 1.4% following an announcement of organizational changes, which include the departure of Chief Commercial Officer & Deputy CEO Björn Annwall. Mondi, a packaging and paper group, rose by 3.3% in London after agreeing to purchase Schumacher Packaging's Western European assets for an enterprise value of 634 million euros.
CMC Markets saw a nearly 5% increase as it forecasted a return to pre-tax profit in its first half, reversing a previous year's loss, driven by increased operating income. Nordex SE rose 1.8% despite a decrease in wind turbine orders to 1,726 MW for the third quarter from 2,251 MW the previous year. However, the company secured 5,083 MW in orders over the six months to September, surpassing last year's 4,892 MW.
In the United States, several key economic events are scheduled for the day. Dallas Fed President Lorie Logan is slated to address the current economic conditions at the Future of Global Energy Conference at 9:15 am ET. The Commerce Department will release its August wholesale inventories report at 10 am ET, with expectations of a 0.3% increase.
The Energy Information Administration's report on crude oil inventories, due at 10:30 am ET, anticipates a rise of 2.0 million barrels following a 3.9 million barrel increase previously. Concurrently, Chicago Fed President Austan Goolsbee will deliver opening remarks at the Chicago Payments Symposium.
At 12:15 pm ET, Richmond Fed President Thomas Barkin is also scheduled to speak at the same symposium. Federal Reserve Vice Chair Philip Jefferson will discuss "The Discount Window, 1990-Present" during a Charlotte Economics Club luncheon at 12:30 pm ET.
The Treasury Department will announce the results of its ten-year notes auction, valued at $39 billion, at 1 pm ET. Later, at 2 pm ET, the Federal Reserve is set to publish the minutes from its latest monetary policy meeting.
In the evening, Boston Fed President Susan Collins is expected to address the Worcester Regional Research Bureau's 39th Annual Meeting at 5:30 pm ET, and at 6 pm ET, San Francisco Fed President Mary Daly will partake in a discussion on monetary policy and economic outlook at Boise State University.
