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U.S. Stocks May Move Modestly Higher In Early Trading

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Following the lackluster performance seen over the past few sessions, stocks may move modestly higher 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 44 points.

Early buying interest may be generated in reaction to news that China is granting tariff exemptions for 16 types of American-made products as a sign of goodwill ahead of the next round of trade talks.

The list included varieties of animal feed such as alfalfa and fish meal, cancer drugs gefitinib and capecitabine, base oil for lubricants and lubricating grease, and some farm chemicals.

The Chinese Customs Tariff Commission said the tariff suspension will take effect next Tuesday and remain in place for a year.

Overall trading activity may remain somewhat subdued, however, as traders look ahead to the European Central Bank's monetary policy decision on Thursday as well as next week's Federal Reserve meeting.

In a post on Twitter this morning, President Donald Trump urged the Fed to lowest interest rates to zero or less, allowing the U.S. to refinance its debt.

"INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet," Trump tweeted.

"The USA should always be paying the lowest rate. No Inflation!" he added. "It is only the naïveté of Jay Powell and the Federal Reserve that doesn't allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of 'Boneheads.'"

On the U.S. economic front, the Labor Department released a report showing a modest uptick in producer prices in the month of August.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in August after rising by 0.2 percent in July. Economists had expected prices to come in unchanged.

Excluding food and energy prices, core producer prices rose by 0.3 percent in August after edging down by 0.1 percent in July. Core prices had been expected to increase by 0.2 percent.

Not long after the start of trading, the Commerce Department is due to release its report on wholesale inventories in the month of July. Wholesale inventories are expected to rise by 0.2 percent.

Stocks experienced another lackluster performance during trading on Tuesday, eventually closing mixed for the third consecutive session. The major averages recovered from an early move to the downside but still ended the day roughly flat.

Despite a late-day surge, the tech-heavy Nasdaq edged down 3.28 points or less than a tenth of a percent to 8,084.16. Meanwhile, the Dow rose 73.92 points or 0.3 percent to 26,909.43 and the S&P 500 inched up 0.96 points or less than a tenth of a percent to 2,979.39.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although Chinese stocks bucked the uptrend. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index surged up by 1.8 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has risen by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index both up by 0.9 percent.

In commodities trading, crude oil futures are climbing $0.56 to $57.96 a barrel after falling $0.45 to $57.40 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,500.30, up $1.10 compared to the previous session's close of $1,499.20. On Tuesday, gold tumbled $11.90.

On the currency front, the U.S. dollar is trading at 107.78 yen compared to the 107.54 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1003 compared to yesterday's $1.1043.

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