U.S. Stocks May Lack Direction Following Two-Day Rally

(RTTNews) - After moving sharply higher to start the week, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open, with the S&P 500 futures up by just 0.1 percent.

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.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of May. 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.

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

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.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index climbed by 0.4 percent, while Hong Kong's Hang Seng Index jumped by 1.2 percent.

Meanwhile, the major European markets have moved to the downside on the day. 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.

In commodities trading, 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.