- On Tuesday, the Dow closed at a fresh record just below the 47,000 psychological barrier,
- Traders await another batch of earnings, including from market heavyweight Tesla (TSLA).
- The economic calendar remains thin amid the government shutdown.
The major stock futures point to a higher opening after Tuesday’s mixed performance, as the U.S.-China trade tensions and the government shutdown continue to simmer on. The positive signal has come despite adverse reactions to earnings reports from Netflix (NFLX) and Texas Instruments (TXN).
Traders also await another earnings deluge, including from market heavyweight Tesla (TSLA), while the economic calendar remains thin amid the government shutdown.
How Futures Are Trading
As of 2:50 a.m. ET on Wednesday, the S&P 500, Dow, Nasdaq 100 and Russell 2000 futures were all modestly higher. On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF (SPY), an exchange-traded fund that tracks the S&P 500 Index, remained ‘extremely bearish’ heading into Wednesday’s session. Retail also held an ‘extremely bearish’ view on the Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index. The message volume on both streams remained ‘high.’
How Market Traded Tuesday
Strong earnings from legacy blue-chip stocks such as Coca-Cola (KO) and 3M Co. (MMM) helped mitigate the weakness seen among communication services, utility and material names. The Dow Jones Industrial Average closed at a fresh record just below the 47,000 psychological barrier, although it did breach the mark intraday, and the S&P 500 Index ended flat with a positive bias. On the other hand, the Nasdaq Composite and the Russell 2000 indices settled lower.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.47%, while the SPY ETF ended flat. The QQQ ETF and the iShares Russell 2000 ETF (IWM) fell 0.03% and 0.47%, respectively. Fund manager Louis Navellier shrugged off Tuesday’s decline as a digestive move after Monday’s substantial gains. Pointing to earnings reports from GE Aerospace (GE), Coca-Cola and General Motors (GM), he noted that earnings continue to come in strong.
Key Catalysts To Watch Out For
While focusing on the stock reaction to earnings released after the market close on Tuesday, traders will also sift through the quarterly reports from AT&T (T), GE Vernova (GEV) and Northern Trust (NTRS), all due before the market open.
Aside from Tesla, the other prominent names reporting after Wednesday’s close are Alcoa (AA), IBM (IBM), Lam Research (LRCX), Las Vegas Sands (LVS), and O’Reilly Auto (ORLY).
On the economic front, Federal Reserve Governor Michael Barr is scheduled to speak at 4 p.m. ET.
How Other Markets Fared
Crude oil continued to be on the path to recovery and rose nearly 2% early Wednesday. Gold futures recovered from Tuesday’s almost 6% slump. The 10-year U.S. Treasury note edged up early Wednesday after remaining at a sub-4% mark in the previous two sessions. The U.S. dollar traded nearly flat against most major currencies.
Most major Asian markets declined on Wednesday amid risk-off sentiment due to the uncertainties. The U.S.-China trade impasse worsened after President Donald Trump hinted that his proposed meeting with his Chinese counterpart, Xi Jinping, may not proceed.
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