| | The major U.S. index futures are pointing to a modestly lower opening on Wednesday, with stocks likely to give back some ground after ending the previous session notably higher.
Profit taking may contribute to initial weakness on Wall Street, as traders cash in on yesterday?s gains amid lingering concerns about the trade dispute between the U.S. and China.
Traders largely shrugged off the escalating trade war on Tuesday, but uncertainty about the impact on the global economy is likely to continue to weigh on their minds.
With the widely anticipated tariff announcements in the rear-view mirror, traders may also start looking ahead to next week?s Federal Reserve meeting.
The Fed is widely expected to raise interest rates by another quarter point, although traders are likely to keep a close eye on the accompanying statement for clues about future rate hikes.
Stocks moved mostly higher during trading on Tuesday, as traders shrugged off concerns about the escalating trade war between the U.S. and China. The strength on the day came on the heels of the pullback seen on Monday.
The major averages ended the day firmly in positive territory but off their highs of the session. The Dow climbed 184.84 points or 0.7 percent to 26,246.96, the Nasdaq advanced 60.32 points or 0.8 percent to 7,956.11 and the S&P 500 rose 15.51 points or 0.5 percent to 2,904.31.
Traders seemed to be expressing relief that the rates of tariffs the U.S. will impose on Chinese goods and retaliatory tariffs China will impose on U.S. goods are not as high as feared.
President Donald Trump announced new tariffs on approximately $200 billion worth of Chinese imports on Monday, although the tariffs will initially be set at 10 percent compared to the 25 percent previously floated by the administration.
However, the tariffs are set to rise to 25 percent on January 1st, and Trump said the U.S. would impose tariffs on another $267 billion worth of Chinese imports if China takes retaliatory action.
Despite the threat from Trump, China announced it would retaliate by imposing tariffs on $60 billion worth of U.S. goods, effective September 24th.
The Chinese tariffs will reportedly range from 5 percent to 10 percent after China previously earmarked some goods for a 20 percent levy.
With the new round of tariffs, Timme Spakman, economist at ING, noted the percentage of world trade affected by U.S. tariffs on China will rise to 2.5 percent.
"If the U.S. carries out its threat to impose tariffs on the remainder of its imports from China, this will equal approximately 4% of world trade," Spakman said.
He added, "Although this percentage may seem small, the tariffs will disrupt Sino-American supply chains, and may, therefore, triple the effects on world trade."
In U.S. economic news, the National Association of Home Builders released a report showing homebuilder confidence has held steady in the month of September.
The report said the NAHB/Wells Fargo Housing Market Index came in at 67 in September, unchanged from August. Economists had expected the index to edge down to 66.
Reflecting the lack of concern about the escalating trade war between the U.S. and China, steel stocks turned in some of the market's best performances on the day.
The NYSE Arca Steel Index jumped by 2.1 percent, closing high for the fifth consecutive session after hitting its lowest closing level in over nine months a week ago.
Tobacco stocks also moved sharply higher over the course of the session, driving the NYSE Arca Tobacco Index up by 2.3 percent.
The rally by tobacco stocks came as the FDA launched a new, comprehensive campaign to warn kids about the dangers of e-cigarettes.
Significant strength was also visible among telecom stocks, as reflected by the 1.5 percent advance by the NYSE Arca Telecom Index.
Retail, energy, and biotechnology stocks also saw notable strength on the day, reflecting broad based buying interest on Wall Street.
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A report released by the Commerce Department showed a sharp increase in new residential construction in the U.S. in the month of August, although the report also showed a steep drop in building permits during the month.
The Commerce Department said housing starts spiked by 9.2 percent to an annual rate of 1.282 million in August from the revised July estimate of 1.174 million.
Economists had expected housing starts to jump by 5.7 percent to a rate of 1.235 million from the 1.168 million originally reported for the previous month.
Meanwhile, the report said building permits tumbled by 5.7 percent to an annual rate of 1.229 million in August from a revised 1.303 million in July.
Building permits, an indicator of future housing demand, had been expected to edge down by 0.1 percent to a rate of 1.310 million from the 1.311 million originally reported for the previous month.
At 10:30 am ET, the Energy Information Administration is due to release its report on oil inventories in the week ended September 14th.
Crude oil inventories are expected to drop by 2.7 million barrels after tumbling by 5.3 million barrels in the previous week. | | | | | Eccentric Millionaire Reveals His Secret $1.8 Million Cryptocurrency Script Click here | | | |
European stocks are seeing modest strength on Wednesday amid bets China and the U.S. will resume contentious trade talks after the latest round of tariffs.
While the French CAC 40 Index has risen by 0.3 percent, the U.K.?s FTSE 100 Index and the German DAX Index are both up by 0.2 percent.
In economic news, U.K. consumer price inflation unexpectedly increased to 2.7 percent in August from 2.5 percent in July, a government report showed. This was the highest rate since January.
The pound has risen against the dollar as the inflation report has fueled expectations that a no-deal Brexit could lift inflation much higher in the coming months and exacerbate the financial squeeze on consumers and businesses.
Automakers Volkswagen, Renault and Peugeot have risen after industry data showed European passenger car registrations increased at faster rates in July and August.
Passenger car sales increased 10.5 percent year-on-year in July after expanding 5.2 percent in June.
Babcock International has rallied after backing its full-year outlook.
On the other hand, staffing firm Adecco has fallen sharply after saying it is seeing a slowdown in revenue growth so far in the third quarter.
British home improvement retailer Kingfisher has also tumbled after its first-half pre-tax profit fell 30 percent from last year on weak sales at its French businesses.
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Asian stocks rose on Wednesday amid hopes China will increase economic stimulus to soften the blow of higher U.S. tariffs. Higher oil prices also underpinned investor sentiment.
China's Shanghai Composite Index jumped 30.90 points or 1.1 percent to 2,730.85 after China said it would retaliate by imposing tariffs on $60 billion worth of U.S. goods, effective September 24th. Hong Kong's Hang Seng Index surged up 322.71 points or 1.2 percent to 27,407.37.
Japanese shares rallied to reach their highest level in nearly eight months as the yen slipped against its key counterparts and the Bank of Japan kept its ultra-loose monetary policy unchanged, as widely expected. Positive trade balance data also boosted sentiment.
Japan posted a 444.594 billion yen trade deficit in August, the Ministry of Finance said. That beat forecasts for a shortfall of 483.2 billion yen following the 231.9 billion yen deficit in July.
Exports climbed 6.6 percent on year to 6.691 trillion yen - exceeding expectations for 5.2 percent and up from 3.9 percent in the previous month. Imports jumped an annual 15.4 percent to 7.136 trillion yen versus forecasts for 14.5 percent and up from 14.6 percent a month earlier.
The Nikkei 225 Index climbed 251.98 points or 1.1 percent to 23,672.52, extending gains for the fourth straight session. The broader Topix Index closed 1.5 percent higher at 1,785.66. Toyota Motor, Fanuc and Honda Motor jumped 1-3 percent.
Australian markets closed higher as higher commodity and oil prices helped lift mining and energy stocks. The benchmark S&P/ASX 200 Index rose 28.50 points or 0.5 percent to 6,190, while the broader All Ordinaries Index ended up 27.50 points or 0.4 percent at 6,297.
Mining heavyweights BHP Billiton and Rio Tinto jumped around 3 percent as copper and iron ore prices rallied on hopes for Chinese stimulus. Gold miners Newcrest and Evolution climbed around 1 percent.
Energy stocks Woodside Petroleum, Oil Search and Santos gained 1-2 percent after crude prices jumped 1.4 percent on Tuesday on expectations of a possible supply shortage
Lender NAB climbed 0.7 percent after cutting executive pay and revamping bonuses. ANZ and Westpac rose around 1 percent. On the flip side, drugmaker CSL fell 1.4 percent to extended losses for a third straight session.
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Crude oil futures are slipping $0.14 to $69.71 a barrel after jumping $0.94 to $69.85 a barrel on Tuesday. Meanwhile, after falling $2.90 to $1,202.90 an ounce in the previous session, gold futures are climbing $6.40 to $1,209.30 an ounce.
On the currency front, the U.S. dollar is trading at 112.31 yen compared to the 112.36 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1675 compared to yesterday?s $1.1667.
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