Futures Pointing To Initial Pullback On Wall Street

Following the advance seen over the past few sessions, stocks may give back ground in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 138 points.

Traders may look to cash in on some of the recent strength in the markets after the strong upward move seen on Tuesday lifted the Nasdaq and the S&P 500 to two-month closing highs and the Dow reached its best closing level in a month.

Waning optimism about peace talks between Russia and Ukraine may also weigh on Wall Street after Ukraine said Russia has violated its pledge to reduce military activity in Kyiv and Chernihiv by continuing to attack both the battlefronts.

After the latest round of ceasefire talks between the two delegations in Istanbul on Tuesday, Russia’s Defense Ministry said it would “drastically reduce military activity” on the two Ukrainian cities.

Russia’s Deputy Defense Minister Alexander Fomin told reporters that the decision to ease the invasion was taken in response to Ukraine’s proposal in Tuesday’s three-hours-long talks to become a neutral and non-nuclear state in exchange for security guarantees.

Russia’s offer was met with skepticism by Ukrainian President Volodymyr Zelensky and other western leaders. Zelensky called for tighter sanctions against Russia.

In U.S. economic news, payroll processor ADP released a report showing private sector employment in the U.S. increased by slightly more than expected in the month of March.

ADP said private sector employment jumped by 455,000 jobs in March after surging by an upwardly revised 486,000 jobs in February.

Economists had expected private sector employment to climb by 450,000 jobs compared to the addition of 475,000 jobs originally reported for the previous month.

Meanwhile, a separate report released by the Commerce Department showed the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2021.

The Commerce Department said real gross domestic product increased by 6.9 percent in the fourth quarter, reflecting a modest downward revision from the previously estimated 7.0 percent spike. Economists had expected GDP growth to be unrevised.

The slightly slower than previously estimated GDP growth primarily reflected downward revisions to consumer spending and exports that were partly offset by an upward revision to private inventory investment.

After holding in positive territory throughout the day’s session, U.S. stocks closed on a firm note on Tuesday, with technology shares turning in another strong performance.

The major averages all ended with solid gains. The Dow closed with a gain of 338.30 points or 1 percent at 35,294.19. The S&P 500 closed higher by 56.08 points or 1.2 percent at 4,631.60, and the Nasdaq settled at 14,619.64 with a gain of 264.73 points or 1.8 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. China’s Shanghai Composite Index surged by 2 percent and Hong Kong’s Hang Seng Index jumped by 1.4 percent, although Japan’s Nikkei 225 Index bucked the uptrend and slid by 0.8 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the U.K.’s FTSE 100 Index is nearly unchanged, the French CAC 40 Index is down by 1 percent and the German DAX Index is down by 1.8 percent.

In commodities trading, crude oil futures are surging $3.09 to $107.33 a barrel after slumping $1.72 to $104.24 a barrel a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,933.40, up $15.40 compared to the previous session’s close of $1,918. On Tuesday, gold tumbled $26.70.

On the currency front, the U.S. dollar is trading at 121.76 yen compared to the 122.88 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1125 compared to yesterday’s $1.1086.

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