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Stocks May Extend Recent Upward Move In Early Trading - U.S. Commentary


After moving mostly higher over the three previous sessions, stocks may see some further upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 146 points.

News that trade talks between U.S. and China officials were extended to a third day may add to recent optimism about a potential trade deal, generating continued buying interest on Wall Street.

Officials have not made public comments about the outcome of the talks, although traders remain hopeful the U.S. and China will reach a long-term trade agreement before a March 1st deadline.

Trading activity may be somewhat subdued, however, as traders look ahead to the release of the minutes of the Federal Reserve's latest monetary policy meeting.

The minutes of the December meeting will provide further insight into the Fed's decision to raise interest rates by 25 basis points to a range of 2.25 percent to 2.50 percent.

Traders are likely to scrutinize the minutes for clues about the outlook for interest rates after Fed Chairman Jerome Powell noted last Friday the central bank "will be patient" as it watches the economy evolve.

The continued upward momentum on Wall Street comes even as the partial government shutdown seems likely to continue after President Donald Trump and Democratic leaders addressed the nation last night.

Both Trump and the Democrats seemed dug in on their positions over the president's demand for $5.7 billion to construct a wall on the U.S. border with Mexico.

Stocks moved mostly higher over the course of the trading day on Tuesday, extending the upward move seen over the two previous sessions. The major averages all ended the day firmly in positive territory.

The Dow surged up 256.10 points or 1.1 percent to 23,787.45, the Nasdaq jumped 73.53 points or 1.1 percent to 6,897.00 and the S&P 500 shot up 24.72 points or 1 percent to 2,574.41.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.1 percent, while Hong Kong's Hang Seng Index soared by 2.3 percent.

The major European markets have also shown strong moves to the upside on the day. While the U.K.'s FTSE 100 Index has surged up by 1.1 percent, the French CAC 40 Index and the German DAX Index are both up by 1.4 percent.

In commodities trading, crude oil futures are spiking $1.47 to $51.25 a barrel after jumping $1.26 to $49.78 a barrel on Tuesday. Meanwhile, after falling $4 to $1,285.90 an ounce in the previous session, gold futures are unchanged.

On the currency front, the U.S. dollar is trading at 108.76 yen compared to the 108.75 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1458 compared to yesterday's $1.1441.

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