U.S. Stocks May Move Back To The Upside In Early Trading

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to move back to the upside after ending the previous session modestly lower.

Technology stocks may help lead a rebound on Wall Street after the tech-heavy Nasdaq closed lower for two straight sessions. The Nasdaq 100 futures are currently up by 0.9 percent.

The markets may also benefit from a continued easing of concerns about contagion from the recent turmoil in the banking sector.

U.S.-listed shares of UBS Group (UBS) are moving notably higher in pre-market trading after the Swiss lender announced Sergio Ermotti will return as CEO to steer its massive takeover of Credit Suisse (CS).

Trading activity may remain relatively subdued, however, as traders await some key U.S. economic data later in the week.

Friday's report on personal income and spending in the month of February is likely to be in focus, as it includes a reading on inflation said to be preferred by the Federal Reserve.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

CME Group's FedWatch Tool currently indicates a 58.3 percent chance the Fed will leave rates unchanged at its next meeting in early May and a 41.7 percent chance of a 25 basis point increase.

After turning in a lackluster performance early in the session, stocks moved mostly lower over the course of the trading day on Tuesday. The major averages all moved to the downside after ending Monday's trading mixed.

The major averages climbed off their worst levels going into the close but remained in the red. While the tech-heavy Nasdaq fell 52.76 points or 0.5 percent to 11,716.08, the S&P 500 dipped 6.26 points or 0.2 percent to 3,971.27 and the Dow edged down 37.83 points or 0.1 percent to 32,394.25.

The weakness that emerged on Wall Street partly reflected ongoing concerns about the outlook for interest rates amid a continued increase in treasury yields.

Following the substantial rebound seen on Monday, the ten-year yield climbed further off last Friday's six-month closing low.

On the U.S. economic front, the Conference Board released a report unexpectedly showing a slight improvement in U.S. consumer confidence in the month of March.

The Conference Board said its consumer confidence index inched up to 104.2 in March from an upwardly revised 103.4 in February.

The modest increase surprised economists, who had expected the consumer confidence index to slip to 101.0 from the 102.9 originally reported for the previous month.

Despite the weakness shown by the broader markets, energy stocks extended Monday's rally amid a continued increase by the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 2.8 percent and the NYSE Arca Oil Index jumped by 1.9 percent.

Considerable strength was also visible among gold stocks, as reflected by the 2.4 percent surge by the NYSE Arca Gold Bugs Index. A notable increase by the price of gold contributed to the strength in the sector.

Airline and steel stocks also saw notable strength on the day, while semiconductor stocks pulled back further off their recent highs.

Commodity, Currency Markets

Crude oil futures are climbing $0.86 to $74.06 a barrel after rising $0.39 to $73.20 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,982.20, down $8.20 compared to the previous session's close of $1,990.40. On Tuesday, gold jumped $18.90.

On the currency front, the U.S. dollar is trading at 132.30 yen compared to the 130.89 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0846 compared to yesterday's $1.0845.


Asian stocks ended Wednesday's session on a mixed note as rising Treasury yields offset easing concerns over the banking sector.

Chinese shares fluctuated before ending slightly lower. The benchmark Shanghai Composite Index slipped 0.2 percent to 3,240.06.

Hong Kong markets led regional gains after Alibaba Group announced a major restructuring. While shares of the e-commerce giant jumped 12.2 percent, the benchmark Hang Seng Index hit a more than three-week high before settling 2.1 percent higher at 20,192.40.

Alibaba unveiled plans to split its business into six separate units, each with their own leadership and scope for public listing. Tencent Holdings and Baidu Inc. ended up 1.8 percent and 1.9 percent, respectively.

Japanese shares closed sharply higher near three-week highs, aided by an over 6 percent spike by heavyweight Softbank Group Corp, which owns a 13.5 percent stake in Alibaba.

The Nikkei 225 Index jumped 1.3 percent to 27,883.78, marking its highest level since March 10 and the biggest single-day gain since March 22. The broader Topix settled 1.5 percent higher at 1,995.48.

Oil explorers Japan Petroleum and Inpex Corp. rose 2-3 percent as oil extended gains for a third consecutive session on industry data showing a big draw in U.S. crude stockpiles.

Fujitec soared 7.3 percent after its new board voted to oust Chairman Takakazu Uchiyama in another win for activist shareholder Oasis Management.

Seoul stocks rose for a second consecutive session, led by auto and battery makers. The Kospi gained 0.4 percent to finish at 2,443.92.

Australian markets ended slightly higher after data showed inflation slowed to an eight-month low in February and retail sales rose only modestly in the month, strengthening investor hopes for a pause by the Reserve Bank of Australia in its policy meeting next week.

The benchmark S&P/ASX 200 Index rose 0.2 percent, to 7,050.30 as firmer commodity prices lifted mining and energy stocks. The broader All Ordinaries Index closed 0.2 percent higher at 7,236.


European stocks have advanced on Wednesday after top U.S. regulators expressed confidence that banks were solvent, blaming the recent collapse of Silicon Valley Bank on mismanagement, rather than systemic risks.

While the French CAC 40 Index has shot up by 1.3 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 0.9 percent.

UBS Group AG has jumped after the Swiss lender rehired Sergio Ermotti as CEO to steer its massive takeover of neighbor Credit Suisse.

Oil & gas firm Shell has also moved higher as oil prices rise for a third straight session on industry data showing a drop in U.S. crude inventories.

Components and solutions provider Essentra has also shown a notable move to the upside after launching a share buyback.

Infineon Technologies shares have soared. The German chipmaker raised its outlook for both its financial second quarter and the whole of 2023.

Meanwhile, Next has slumped after the British clothing retailer kept its guidance for a 1.5 percent decline in full-price sales and profit of 795 million pounds for 2023-24.

Automaker Mercedes Benz has also fallen on news that Kuwait's sovereign wealth fund is planning to reduce its stake in the luxury carmaker.

In economic news, confidence among German consumers strengthened for the sixth consecutive month on improving income expectations, a closely watched survey by the market research group GfK revealed.

The consumer confidence index for April climbed to -29.5 from -30.6 in March, the Nuremberg-based GfK said.

Separate data showed U.K. mortgage approvals rose more than expected in February, despite higher borrowing costs.

U.S. Economic Reports

The National Association of Realtors is scheduled to release its report on pending home sales in the month of February at 10 am ET. Pending home sales are expected to slump by 3.0 percent in February after spiking by 8.1 percent in January.

Also at 10 am ET, Federal Reserve Vice Chair for Supervision Michael Barr and FDIC Chairman Martin Gruenberg are due to testify before the House Financial Services Committee regarding the recent failures of Silicon Valley Bank and Signature Bank.

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended March 24th at 10:30 am ET.

Crude oil inventories are expected to inch up by 0.1 million barrels after climbing by 1.1 million barrels in the previous week.

At 1 pm ET, the Treasury Department is due to announce the results of this month's auction of $35 billion worth of seven-year notes.

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