After ending the previous session sharply lower, stocks may move back to the 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 100 points.
The upward momentum on Wall Street comes as the price of crude oil continues to surge, jumping to its highest levels in eleven years.
Energy stocks are likely to benefit from the spike in oil prices, which comes amid the ongoing war in Ukraine and OPEC’s decision to stick with plans for a modest increase in output.
The futures have given back some ground following the release of remarks from Federal Reserve Chair Jerome Powell, who is due to testify before the House Financial Services Committee later this morning.
In prepared remarks, Powell said the Fed still believes it will be appropriate to raise interest rates later this month, citing inflation well above 2 percent and a strong labor market.
The likely increase in interest rates comes even though Powell acknowledged that the Russia-Ukraine conflict has introduced significant uncertainty for the U.S. economic outlook.
“Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways,” Powell said. “We will need to be nimble in responding to incoming data and the evolving outlook.”
On the U.S. economic front, payroll processor ADP released a report showing U.S. private sector employment jumped by much more than expected in the month of February.
ADP said private sector employment surged by 475,000 jobs in February compared to economist estimates for an increase of 388,000 jobs.
The report also showed a substantial revision to the January data, with the revised data showing employment spiked by 509,000 jobs compared to the previously reported loss of 301,000 jobs.
Later in the day, the Federal Reserve is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.
U.S. stocks reeled under sustained selling pressure and ended firmly in negative territory on Tuesday amid rising concerns about growth due to the ongoing Russia-Ukraine war and a raft of sanctions imposed on Russia by the U.S. and Western allies.
The market stayed weak throughout the session and the major averages all ended with sharp losses. The Dow ended down by 597.65 points or 1.7 percent at 33,294.95. The S&P 500 drifted down 67.68 points or 1.6 percent to 4,306.26 and the Nasdaq finished with a loss of 218.94 points or 1.6 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slumped by 1.7 percent, while Australia’s S&P/ASX 200 Index rose by 0.3 percent.
The major European markets have also turned mixed on the day. While the German DAX Index has edged down by 0.1 percent, the French CAC 40 Index is up by 0.2 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.
In commodities trading, crude oil futures are surging $8.10 to $111.51 a barrel after soaring $7.69 to $103.41 a barrel a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,932.10, down $11.70 compared to the previous session’s close of $1,943.80. On Tuesday, gold spiked $43.10.
On the currency front, the U.S. dollar is trading at 115.41 yen compared to the 114.92 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1095 compared to yesterday’s $1.1125.
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