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

Following the pullback seen in the previous session, 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 S&P 500 futures up by 0.3 percent.

Continued optimism about the outlook for interest rates may contribute to renewed buying interest on Wall Street amid a decrease in treasury yields.

The yield on the benchmark ten-year note fell to its lowest level in two months earlier this morning but has regained some ground in recent trading.

While the minutes of the latest Federal Reserve meeting failed to provide any indications the central bank plans to cut interest rates in the near future, CME Group’s FedWatch Tool still suggests the next move will be a rate cut in mid-2024.

Stocks may also benefit from easing concerns about the conflict in the Middle East after Hamas and Israel agreed to a Qatar-mediated pause in fighting.

On the U.S. economic front, the Labor Department released a report showing first-time claims for unemployment benefits fell by more than expected in the week ended November 18th.

The report said initial jobless claims fell to 209,000, a decrease of 24,000 from the previous week’s revised level of 233,000.

Economists had expected jobless claims to dip to 225,000 from the 231,000 originally reported for the previous week.

A separate report released by the Commerce Department showed new orders for U.S. manufactured durable goods pulled back by much more than expected in the month of October.

The Commerce Department said durable goods orders plunged by 5.4 percent in October after surging by 4.6 percent in September. Economists had expected durable goods orders to tumble by 3.1 percent.

The sharp pullback in durable goods orders came as orders for transportation equipment plummeted by 14.8 percent in October after spiking by 11.6 percent in September.

Excluding the steep drop in orders for transportation equipment, durable goods orders were virtually unchanged in October after edging up by 0.2 percent in September. Ex-transportation orders were expected to inch up by 0.1 percent.

Shortly after the start of trading, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of November.

The consumer sentiment index for November is expected to be upwardly revised to 60.5 from a preliminary reading of 60.4, which was down from 63.8 in October.

Stocks moved to the downside during trading on Tuesday, giving back ground after ending the previous session mostly higher. Selling pressure remained relatively subdued, however, allowing the major averages to hang on to the bulk of their recent gains.

The major averages all finished the day in the red, with the tech-heavy Nasdaq posting a more notably loss. While the Nasdaq slid 84.55 points or 0.6 percent to 14,199.98, the S&P 500 dipped 9.19 points or 0.2 percent to 4,538.19 and the Dow slipped 62.75 points or 0.2 percent to 35,088.29.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index fell by 0.8 percent.

Meanwhile, European stocks have moved mostly higher on the day. The German DAX Index is up by 0.5 percent and the French CAC 40 Index is up by 0.4 percent, although the U.K.’s FTSE 100 Index has bucked the uptrend and edged down by 0.2 percent.

In commodities trading, crude oil futures are plunging $3.02 to $74.75 a barrel after edging down $0.06 to $77.77 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,002.10, up $0.50 compared to the previous session’s close of $2,001.60. On Tuesday, gold jumped $21.30.

On the currency front, the U.S. dollar is trading at 149.10 yen compared to the 148.39 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0896 compared to yesterday’s $1.0911.

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