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U.S. Stocks May Back To Downside After Yesterday's Rebound

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Stocks may come under pressure in early trading on Wednesday, giving back ground following the notable rebound seen in the previous session. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 139 points.

The downward momentum on Wall Street comes as the escalating U.S.-China trade war has investors paying close attention to daily developments on the currency front.

The People's Bank of China set the midpoint for onshore yuan trading at 6.9996 per dollar, slightly stronger than the key 7.00 per dollar level but 0.4 percent weaker than 6.9683 on Tuesday.

The Chinese central bank setting the midpoint for the Chinese currency at a stronger than expected level contributed yesterday's rally.

Negative sentiment may also be generated in reaction to disappointing earnings from Disney (DIS), with the entertainment giant slumping by nearly 5 percent in pre-market trading.

After the close of trading on Tuesday, Disney reported fiscal third quarter results that missed analyst estimates on both the top and bottom lines.

Overall trading activity may be somewhat subdued, however, as another light day on the U.S. economic front may keep some traders on the sidelines.

The economic calendar remains relatively sparse throughout the week, although a report on producer price inflation may attract attention on Friday.

Following the sell-off seen on Monday, stocks showed a strong move back to the upside during trading on Tuesday. The major averages fluctuated after an early upward move but maintained a positive bias throughout the session.

The major averages finished the session near their best levels of the day. The Dow jumped 311.78 points or 1.2 percent to 26,029.52, the Nasdaq soared 107.23 points or 1.4 percent to 7,833.27 and the S&P 500 surged up 37.03 points or 1.3 percent to 2,881.77.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.3 percent, while Hong Kong's Hang Seng Index inched up by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.4 percent, the German DAX Index and the French CAC 40 Index are up by 0.7 percent and 0.8 percent, respectively.

In commodities trading, crude oil futures are tumbling $0.96 to $52.67 a barrel after plunging $1.06 to $53.63 a barrel on Tuesday. Meanwhile, after climbing $7.70 to $1,484.20 an ounce in the previous session, gold futures are spiking $22.80 to $1,507 an ounce.

On the currency front, the U.S. dollar is trading at 105.95 yen compared to the 106.47 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1201 compared to yesterday's $1.1199.

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