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

(RTTNews) - The major U.S. index futures are currently pointing to a slightly higher open on Wednesday, with stocks likely to move back to the upside following the pullback seen in the previous session.

An advance by shares of Nvidia (NVDA) may contribute to initial strength on Wall Street, as the AI darling and market leader is climbing by 0.7 percent in pre-market trading.

The upward move by Nvidia comes after CEO Jensen Huang told CNBC's "Squawk Box" artificial intelligence computing demand has increased "substantially" in the last six months.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of the minutes of the Federal Reserve's latest monetary policy meeting this afternoon.

The minutes of the Fed's September meeting, when the central bank decided to lower interest rates by a quarter point, may shed additional light on the outlook for rates.

Following the upward move seen over the course of the previous session, stocks gave back some ground during trading on Tuesday. The major averages all moved to the downside, with the Nasdaq and the S&P 500 pulling back off Monday's record closing highs.

The major averages finished the day off their worst levels but still in negative territory. The Nasdaq slid 153.30 points or 0.7 percent to 22,788.36, the S&P 500 fell 25.69 points or 0.4 percent to 6,714.59 and the Dow dipped 91.99 points or 0.2 percent to 46,602.98.

The pullback on Wall Street may partly have reflected profit taking following recent strength in the markets, which saw the S&P 500 close higher for seven straight sessions.

A slump by shares of Oracle (ORCL) also weighed on the markets, with the tech company tumbled by 2.5 percent after a report from The Information raised questions about the profitability of its artificial intelligence rollout.

Lingering concerns about the economic impact of the ongoing U.S. government shutdown may also have generated some selling pressure, although traders have largely shrugged off the suspension of non-essential government operations in recent sessions.

Lawmakers in Washington continue to struggle to pass a temporary funding bill due in part to Democrats' demands that the legislation include an extension of enhanced Obamacare tax credits.

The shutdown has also led to the indefinite delay of key U.S. economic data, including the Labor Department's closely watched monthly jobs report that was due to be released last Friday.

The lack of data has led to some uncertainty about the outlook for interest rates, although the Federal Reserve is still widely expected to cut rates by another quarter point later this month.

Remarks by several Fed officials, including Fed Chair Jerome Powell, this week along with the release of the minutes of the central bank's latest meeting may shed additional light on the outlook for rates.

Housing stocks turned in some of the market's worst performances on the day, dragging the Philadelphia Housing Sector Index down by 3.0 percent to its lowest closing level in almost two months.

Significant weakness also emerged among semiconductor stocks, with the Philadelphia Semiconductor Index slumping by 2.1 percent after ending Monday's trading at a record closing high.

Computer hardware, gold and airline stocks also saw considerable weakness, while some strength was visible among utilities stocks.

Commodity, Currency Markets

Crude oil futures are surging $1.05 to $62.78 a barrel after inching up $0.04 to $61.73 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,054, up $49.60 compared to the previous session's close of $4,004.40. On Tuesday, gold jumped $28.10.

On the currency front, the U.S. dollar is trading at 152.60 yen compared to the 151.90 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1635 compared to yesterday's $1.1655.

Asia

Asian stocks ended mostly lower on Wednesday after Wall Street's main indexes pulled back from record highs overnight on the back of mixed messages from Federal Reserve officials on the pace on interest rate cuts and concerns about a bubble forming around artificial intelligence.

Federal Reserve Governor Stephen Miran said tariffs are not driving inflation and the Fed can keep easing policy. Separately, Fed Bank of Minneapolis President Neel Kashkari warned that drastic rate cuts would risk stoking prices.

Meanwhile, the Trump administration has warned of no guaranteed back pay for federal workers as the government shutdown headed into its eighth day.

South Korean markets were closed for Chuseok and those in mainland China remained closed for the Mid-Autumn Festival.

Hong Kong's Hang Seng Index fell 0.5 percent to 26,829.46 as tech stocks followed their U.S. peers lower on concerns about stretched valuations.

Japanese markets ended lower even as dovish policy expectations continued to weigh on the yen.

The yen extended its losses to a fifth day, reaching its lowest level against the dollar since February as the release of soft wage data dampened market expectations for further interest rate hikes from the Bank of Japan (BoJ).

The Nikkei 225 Index dropped 0.5 percent to 47,734.99, snapping a four-day winning streak. The broader Topix Index notched a record high, rising 0.2 percent to 3,235.66 on renewed hopes for government stimulus.

Australian markets ended slightly lower as losses in retail, technology and gold stocks outweighed gains in the healthcare sector.

The benchmark S&P/ASX 200 Index slipped 0.1 percent to 8,947.60, marking its third consecutive session of losses. The broader All Ordinaries Index ended marginally lower at 9,244.80.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rose 0.3 percent to a record high of 13,568.48 after the Reserve Bank of New Zealand slashed its benchmark rate by an aggressive 50 basis points and signaled room for further easing.

Europe

European stocks have moved mostly higher on Wednesday, with banks and energy stocks leading the way despite the ongoing political crisis in France and U.S. government shutdown worries.

Investors also shrugged off data that showed German industrial production declined more than expected in August.

Industrial output fell 4.3 percent in August, in contrast to the 1.3 percent increase in July, Destatis reported. Output was expected to fall 1 percent.

While the German DAX Index is up by 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.9 percent.

Banks Commerzbank, Deutsche Bank and Credit Agricole all traded up around 1 percent. Oil giant BP Plc gained 0.6 percent, tracking higher oil prices.

German wind turbine manufacturer Nordex SE rose nearly 2 percent on securing orders in the U.S. totaling 236 megawatts (MW).

Copper producer Aurubis slumped 5.6 percent. The company has set an earnings target for the 2025/26 financial year broadly in line with what it had guided for the previous year.

ABB shares rose 1.4 percent. The Swiss-Swedish multinational corporation has agreed to sell its global robotics division to SoftBank Group for $5.38 billion.

Fragrance firm Givaudan added 1.2 percent after an announcement that it would invest CHF187 million ($233 million) in the construction of a new production plant near Cincinnati, Ohio, in the United States.

BMW plunged 8.2 percent after the German luxury carmaker cut its profit forecast, citing U.S. tariffs and weaker-than-expected growth in the Chinese market.

ASML Holding declined 1.3 percent after U.S. lawmakers called for broader bans on chipmaking equipment sales to China.

Lloyds Banking Group rallied 2.3 percent in London. The bank announced that it is assessing the FCA's motor finance redress scheme.

Bunzl fell 1.2 percent after saying it has completed two new acquisitions in Ireland and Spain.

U.S. Economic News

St. Louis Federal Reserve President Alberto Musalem is scheduled to deliver welcoming remarks before the 2025 Community Banking Research Conference at 9:20 am ET.

At 9:30 am ET, Federal Reserve Governor Michael Barr is due to speak on "Community Banking" before the 2025 Community Banking Research Conference.

The Energy Information Administration is scheduled to release its report on crude oil inventories in the week ended October 3rd at 10:30 am ET. Crude oil inventories are expected to increase by 2.3 million barrels after rising by 1.8 million barrels in the previous week.

At 1 pm ET, the Treasury Department is due to announce the results of this month's auction of $39 billion worth of ten-year notes.

The Federal Reserve is scheduled to release the minutes of its September 16-17 monetary policy meeting at 2 pm ET.

At 3:15 pm ET, Minneapolis Federal Reserve President Neel Kashkari is due to speak before Day 1 of the Center for Indian Country Development's 10-Year Anniversary Event and Data Summit.

Federal Reserve Governor Michael Barr is scheduled speak on "Community Development and Indian Country" before Day 1 of the Indian Country Development's 10-Year Anniversary Event and Data Summit at 5:45 pm ET.

At 7:15 pm ET, Chicago Federal Reserve President Austan Goolsbee is due to speak before the Chicago Payments Symposium 2025.