Traders May Stick To The Sidelines Following Recent Surge

(RTTNews) - The major U.S. index futures are currently pointing to a roughly flat open on Wednesday, with stocks likely to show a lack of direction after surging to start the week.

Traders may be reluctant to make significant moves following a two-day rally, which saw the major averages reach their best levels in four months.

The strong upward moves seen on Monday and Tuesday have also lifted the Nasdaq and the S&P 500 back within striking distance of their record highs.

Traders are also likely to keep an eye on development in the Middle East following yesterday's news of a ceasefire between Israel and Iran.

Stocks moved sharply higher during trading on Tuesday, extending the strong upward move seen over the course of the previous session. With the continued advanced, the major averages reached their best closing levels in four months.

The major averages pulled back off their best levels going into the close but remained firmly positive. The Nasdaq surged 281.56 points or 1.4 percent to 19,912.53, the Dow jumped 507.24 points or 1.2 percent to 43,089.02 and the S&P 500 shot up 67.01 points or 1.1 percent to 6,092.18.

The continued strength on Wall Street came after President Donald Trump announced a ceasefire between Israel and Iran is now in effect.

"On the assumption that everything works as it should, which it will, I would like to congratulate both countries, Israel and Iran, on having the stamina, courage, and intelligence to end what should be called 'THE 12-DAY WAR,'" Trump wrote on Truth Social.

While both sides have accused each other of violating the ceasefire, traders appeared to remain optimistic about easing tensions in the Middle East.

Meanwhile, traders largely shrugged off comments from Federal Reserve Chair Jerome Powell indicating the central bank will remain on hold despite pressure from Trump to lower interest rates.

"For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance," Powell said in prepared remarks before the House Financial Services Committee.

On the U.S. economic front, the Conference Board released a report showing an unexpected deterioration by consumer confidence in the month of June.

The Conference Board said its consumer confidence index fell to 93.0 in June from a revised 98.4 in May. Economists had expected the index to inch up to 99.0 from the 98.0 originally reported for the previous month.

Semiconductor stocks turned in some of the market's best performances on the day, with the Philadelphia Semiconductor Index soaring by 3.8 percent to its best closing level in five months.

Substantial strength was also visible among airline stocks, as reflected by the 3.6 percent surge by the NYSE Arca Airline Index.

Computer hardware, networking and biotechnology stocks also saw strength on the day, while gold and oil producer stocks bucked the uptrend.

Commodity, Currency Markets

Crude oil futures are rising $0.19 to $64.56 a barrel after plunging $4.14 to $64.37 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,340.70, up $6.80 compared to the previous session's close of $3,333.90. On Tuesday, gold dove $61.10.

On the currency front, the U.S. dollar is trading at 145.77 yen compared to the 144.94 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1594 compared to yesterday's $1.1609.

Asia

Asian stocks ended on a cautious note Wednesday after rising sharply in the previous session on Israel-Iran ceasefire relief.

A U.S.-brokered ceasefire between Israel and Iran appeared to be holding but elsewhere, Israel's army said seven of its soldiers were killed in combat in Gaza, where the war with Palestinian militant group Hamas continued.

The U.S. dollar struggled to regain lost ground in Asian trading after Federal Reserve Chair Jerome Powell gave balanced comments on prospects for rate cuts.

Gold edged up slightly after sharp losses in the prior session. Oil prices jumped nearly 2 percent but held near multi-week lows on the prospect that crude oil flows would not be disrupted.

China's Shanghai Composite Index surged 1.0 percent to 3,455.97 and Hong Kong's Hang Seng Index jumped 1.2 percent to 24,474.67 amid bets that Fed rate cuts amid a slump in oil prices will weaken the U.S. dollar and spur inflows to Asian markets.

Japanese markets eked out modest gains to end at over four-month high. The Nikkei 225 Index rose 0.4 percent to 38,942.07, with chip-related stocks like Advantest and Tokyo Electron surging more than 3 percent each. The broader Topix Index closed little changed with a positive bias at 2,782.24.

Olympus Corp. plummeted 10.6 percent after the U.S. Food and Drug Administration (FDA) issued alerts to stop imports of certain medical devices made by the company in Japan.

Seoul stocks ended slightly higher, with the Kospi edging up 0.2 percent to close at 3,108.25.

Following a review, MSCI said the limited convertibility of the Korean won in the offshore currency market is a key barrier to its reclassification to developed market status.

Australian markets ended marginally higher as banks gained ground, offsetting declines in the mining sector.

Australian consumer price inflation slowed more than expected in May and the closely watched core measure hit three-and-a-half-year lows, setting the stage for a third cut in interest rates by the Reserve Bank of Australia next month.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index finished marginally lower at 12,460.96, extending losses for the sixth consecutive session as May month exports and imports showed little change from April.

Europe

European shares moved modestly lower on Wednesday after rallying in the previous session as the fragile Iran-Israel truce took hold.

U.S. President Donald Trump's Middle East envoy said late on Tuesday that talks between U.S. and Iran were "promising" and that Washington was hopeful for a long-term peace deal.

In economic news, French consumer confidence held steady in June and remained well below its long-term average, monthly survey data from the statistical office INSEE showed.

The consumer sentiment index stood at 88.0 in June, the same as in May. Economists had expected the score to rise to 89.0.

The NATO summit will be in focus later in the day, where leaders are due to finalize agreements on defense spending.

Investors also await U.S. Federal Reserve Chair Jerome Powell's second day of testimony before the Senate for additional clues on the outlook for inflation and interest rates.

While the U.K.'s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.4 percent.

Wind turbine maker Nordex surged 1.6 percent after securing a contract from renewables developer Umweltgerechte Kraftanlagen GmbH & Co KG.

Automotive retailer Vertu Motors rallied 2.3 percent as it reported 7 percent growth in new car retail sales in the three months to May 31.

Defence contractor Babcock International soared 13 percent after reporting strong preliminary annual results and raising its dividend and revenue target.

Oxford Instruments, a provider of high-technology products and systems, rose 1.1 percent after announcing it will commence a share purchase program by June 24, 2026.

U.S. Economic News

The Commerce Department is scheduled to release its report on new home sales in the month of May at 10 am ET. New home sales are expected to retreat to an annual rate of 690,000 in May after surging to a rate of 743,000 in April.

Also at 10 am ET, Federal Reserve Chair Jerome Powell is due to delivery his semi-annual monetary policy report testimony before the Senate Banking, Housing and Urban Affairs Committee.

The Energy Information Administration is scheduled to release its report on crude oil inventories in the week ended June 20th at 10:30 am ET. Crude oil inventories are expected to edge down by 0.6 million barrels after tumbling by 11.5 barrels in the previous week.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month's auction of $70 billion worth of five-year notes.