U.S. Stocks Set for Positive Opening
U.S. stocks appear set for a positive opening on Wednesday after Federal Reserve Chair Jerome Powell’s speech on Tuesday touched upon the central bank’s quantitative tightening program as well as the weakness in the labor market.
Powell’s Remarks
Powell stated, “Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions. We may approach that point in coming months, and we are closely monitoring a wide range of indicators to inform this decision.” His remarks come ahead of the Federal Open Market Committee’s (FOMC) October meeting, scheduled for October 28 and 29.
Market Expectations
According to data from the CME FedWatch tool, there is a 97.8% probability of a 25 basis point interest rate cut. This expectation has led to a surge in futures, with Dow Jones futures up by 0.44% and the S&P 500 futures gaining 0.65%. The tech-heavy Nasdaq 100’s futures rose 0.86%, while futures of the Russell 2000 index surged 1.11%.
ETF Performance
The SPDR S&P 500 ETF (SPY) was up 0.66%, Invesco QQQ Trust (QQQ) gained 0.88% on Wednesday morning, and SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.44%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.
Asian Markets
Asian markets ended Wednesday’s trading session on a positive note, with the KOSPI leading with gains of 2.61%, followed by the Hang Seng index at 1.8%, and the Hang Seng and the TWSE Capitalization Weighted Stock indexes at 1.77% each. The Shanghai Composite gained 1.2%.
Stocks to Watch
Several stocks are expected to be in focus on Wednesday, including:
- ASML Holding NV (ASML): ASML shares soared over 4% pre-market after the company’s third-quarter (Q3) results.
- Bank of America Corp. (BAC): Bank of America shares surged 5% in Wednesday’s pre-market session after the lender’s Q3 results beat Wall Street expectations.
- Archer-Daniels-Midland Co. (ADM), Bunge Global SA (BG): The two crop traders will be in focus on Wednesday after President Donald Trump said his administration was considering ending some cooking oil business with China.
- United Airlines Holdings Inc. (UAL), Morgan Stanley (MS), and Abbott Laboratories (ABT): These companies are scheduled to report their latest quarterly earnings on Wednesday.
Conclusion
In conclusion, the U.S. stock market is expected to open positively on Wednesday, driven by Powell’s remarks and the expected interest rate cut. The performance of ETFs and the positive trend in Asian markets also contribute to the bullish sentiment. Investors will be closely watching the stocks mentioned above, as they are expected to be in focus due to their earnings reports and other market developments.
