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Geopolitical Concerns May Weigh On Wall Street

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The major U.S. index futures are pointing to a lower opening on Wednesday following the strong upward move seen in the previous session.

Traders may cash in on yesterday's gains amid geopolitical concerns after President Donald Trump warned Russia "get ready" for missiles being launched at Syria.

Stocks moved sharply higher during trading on Tuesday, adding to the modest gains posted in the previous session.

The major averages ended the day firmly in positive territory. The Dow jumped 428.90 points or 1.8 percent to 24,408.00, the Nasdaq soared 143.96 points or 2.1 percent to 7,094.30 and the S&P 500 surged up 43.71 points or 1.7 percent to 2,656.87.

The strength on Wall Street reflected a positive reaction to comments from Chinese Xi Jinping regarding the trade dispute between China and the U.S.

Xi promised to lower import tariffs on products including cars and take other steps to further open the world's second-largest economy.

On the U.S. economic front, the Labor Department released a report showing producer prices increase by more than expected in the month of March.

The Labor Department said its producer price index rose by 0.3 percent in March after edging up by 0.2 percent in February. Economists had expected producer prices to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices also increased by 0.3 percent in March after rising by 0.2 percent in the previous month. Core prices had been expected to rise by 0.2 percent.

Energy stocks turned in some of the market's best performances on the day, benefiting from a sharp increase by the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 5.4 percent, the NYSE Arca Natural Gas Index jumped by 4 percent and the NYSE Arca Oil Index spiked by 2.9 percent.

Considerable strength was also visible among computer hardware stocks, as reflected by the 3.7 percent rally by the NYSE Arca Computer Hardware Index.

Steel, semiconductor, and biotechnology stocks are also saw notable strength on the day amid broad based buying interest on Wall Street.

Commodity, Currency Markets

Crude oil futures are climbing $0.65 to $66.16 a barrel after jumping $2.09 to $65.51 a barrel on Tuesday. Meanwhile, after climbing $5.80 to $1,345.90 an ounce in the previous session, gold futures are surging up $11.90 to $1,357.80 an ounce.

On the currency front, the U.S. dollar is trading at 106.73 yen compared to the 107.20 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.2384 compared to yesterday's $1.2356.

Asia

Asian stocks gave up early gains to end mixed on Wednesday despite strong gains on Wall Street overnight and a rally in oil prices amid warnings of western air strikes against Syria.

China's Shanghai Composite index rose 17.76 points or 0.56 percent to 3,208.08 after PBOC Governor Yi Gang said China will allow more foreign investment in the financial sector over the next few months.

Meanwhile, China's inflation eased more-than-expected in March as demand decreased after the Lunar New Year holidays, official data showed. Similarly, factory gate inflation weakened for the fifth consecutive month.

Consumer prices in China were up just 2.1 percent year-on-year in March, well beneath expectations for 2.6 percent and down sharply from 2.9 percent in February. Producer prices gained an annual 3.1 percent - also shy of forecasts for 3.3 percent and down from 3.7 percent in the previous month.

Hong Kong's Hang Seng index was up half a percent in late trade, with energy and technology stocks faring well after oil prices soared and Facebook Chief Mark Zuckerberg apologized to U.S. lawmakers for a privacy scandal.

Japanese shares fell for the first time in three sessions amid reports that U.S. President Donald Trump is considering more aggressive strike in Syria within the next 48 hours. The Nikkei average shed 0.49 percent to end at 21,687.10, while the broader Topix index closed 0.38 percent lower at 1,725.30.

Retail stocks were among the worst hit after J.Front Retailing's full-year profit forecast fell short of market expectations. Fast Retailing dropped 1.3 percent, J.Front Retailing lost 9.3 percent and Takashimaya declined 3.3 percent.

SoftBank shares surged 3.5 percent on the back of reports that the Sprint telecoms company it owns had resumed tentative merger talks with rival telecoms group T-Mobile US.

In economic releases, core machine orders in Japan advanced a seasonally adjusted 2.1 percent sequentially in February, the Cabinet Office said - coming in at 891.0 billion yen. That beat forecasts for a decline of 2.5 percent following the 8.2 percent spike in January.

Australian shares retreated as investors sold off defensive stocks and lapped up resource stocks on the back of strength in commodity prices after China promised lower tariffs.

The benchmark S&P/ASX 200 index dropped 28.30 points or 0.48 percent to 5,828.70 while the broader All Ordinaries index ended down 26 points or 0.44 percent at 5,925.80.

The big four banks fell between 1 percent and 1.4 percent while mining heavyweights BHP Billiton and Rio Tinto rallied 1.9 percent and 1.3 percent, respectively. South32 tumbled 2.3 percent after the company said it would appeal a Colombian Courts' decision to pay damages to local communities.

Energy stocks Oil Search, Woodside Petroleum and Beach Energy climbed 1-2 percent as Brent crude futures rose above $71 a barrel after surging more than 3 percent on Tuesday amid warnings of western air strikes against Syria.
WorleyParsons shares closed 5 percent higher.

On the data front, consumer confidence in Australia ebbed in April, the latest survey from Westpac Bank revealed as its index sank 0.6 percent to a score of 102.4. That follows the 0.2 percent gain in March to a reading of 103.0.

Europe

European stocks were subdued on Wednesday after rising to their highest level in about a month the previous day as China softened its trade rhetoric and said it is willing to open up its economy.

The pan-European Stoxx Europe 600 index was down 0.20 percent at 377.67 in late opening deals after climbing 0.8 percent in the previous session.

The German DAX, France's CAC 40 index and the U.K.'s FTSE 100 were down between 0.1 percent and 0.3 percent as the rising risk of a real war in Syria kept investors nervous.

Russia has threatened to shoot down any U.S. missiles fired at neighboring Syria if the U.S. decides to strike Syrian bases in response to a chemical attack.

Swiss chocolate maker Barry Callebaut tumbled 3.7 percent after its Q2 profit missed forecasts.

Air France shares gained 1.5 percent. The airline has reportedly asked striking unions to resume talks after doubling the 1 percent immediate pay increase previously offered.

Evotec jumped 2 percent after it announced a strategic collaboration with Petra Pharma Corp.

Deutsche Telekom soared 3.5 percent after reports that Sprint and T-Mobile have decided to restart talks to merge.

Grocer Tesco jumped almost 6 percent after its operating profits in the last three months of its financial year rose 28 percent.

In economic news, French manufacturing confidence deteriorated in March, survey data from Bank of France showed. The corresponding index fell to 103 from 105 in February. The score was forecast to remain unchanged at 105.

U.K. industrial output edged up 0.1 percent month-on-month in February, compared to January's 1.3 percent increase, the Office for National Statistics said. Production was expected to climb 0.4 percent.

Another report showed that the U.K. trade deficit narrowed more-than-expected to -0.97bn in February.

U.S. Economic Reports

Consumer prices in the U.S. edged lower in the month of March, according to a report released by the Labor Department.

The Labor Department said the consumer price index dipped by 0.1 percent in March after rising by 0.2 percent in February. Economists had expected consumer prices to come in unchanged.

Excluding food and energy prices, core consumer price index rose by 0.2 percent March, matching the increase seen in the previous month. The uptick in core prices matched economist estimates.

At 10:30 am ET, the Energy Information Administration is scheduled to release its report on oil inventories in the week ended April 6th.

Crude oil inventories are expected to rise by 0.2 million barrels after slumping by 4.6 million barrels in the previous week.

The Treasury Department is scheduled to release the results of its auction of $21 billion worth of ten-year notes at 1 pm ET.

At 2 pm, the Federal Reserve is due to release the minutes of its latest monetary policy meeting, during which the Fed raised interest rates to a range of 1.5 to 1.75 percent.

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