Bargain Hunting May Contribute To Initial Rebound On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Wednesday, with stocks likely to regain ground after moving sharply lower over the past few sessions.

Bargain hunting may contribute to initial strength on Wall Street, as some traders look to pick up stocks at relatively reduced levels following the recent weakness.

The major averages slumped to their lowest closing levels in a month on Tuesday amid lingering concerns about a potential AI bubble.

Early buying interest may be somewhat subdued, however, as traders look ahead to the release of earnings news from market leader and AI darling after the close of today's trading.

"Nvidia reports tonight and the slightest bit of news to disappoint investors has the potential to whip up a tornado across global markets," said Russ Mould, investment director at AJ Bell. "Investors will be hanging on [CEO] Jensen Huang's every word and looking for clues that big investment in AI is worth it."

"Huang is an eternal optimist and Nvidia has a habit of smashing earnings expectations," he added. "Therefore, investors might be digging deeper than usual into the numbers to spot any signs of weakness, rather than simply being swayed by the headline narrative."

Traders may also be reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting this afternoon.

The Fed minutes may shed additional light on the outlook for interest rates amid a recent decline in expectations for another quarter point rate cut at the central bank's next meeting in December.

CME Group's FedWatch Tool currently indicates the changes the Fed lowers rates by 25 basis points next month are roughly 50-50.

Stocks regained some ground after an early sell-off but still ended Tuesday's trading significantly lower. The major averages added to the notable losses posted during Monday's session, once again falling to their lowest closing levels in a month.

The major averages all finished the day firmly in negative territory. The Dow slumped 498.50 points or 1.1 percent to 46,091.74, the Nasdaq tumbled 275.23 points or 1.2 percent to 22,432.85 and the S&P 500 slid 55.09 points or 0.8 percent to 6,617.32.

Weakness among technology stocks continued to weigh on Wall Street amid an extended decline by Nvidia. Shares of Nvidia tumbled by 2.8 percent after slumping by 1.8 percent on Monday as traders look ahead to the release of the chipmaker's quarterly results.

The strength of Nvidia's results and its guidance could have a significant impact on the markets amid recent concerns about an AI bubble.

Traders are also looking ahead to the release of some U.S. economic data that was delayed by the government shutdown, including the September jobs report on Thursday.

On the U.S. economic front, the Commerce Department released a report showing a significant rebound by new orders for U.S. manufactured goods in the month of August.

The report said factory orders jumped by 1.4 percent in August after tumbling by 1.3 percent in July. The rebound was in line with economist estimates.

Computer hardware stocks turned in some of the market's worst performances on the day, with the NYSE Arca Computer Hardware Index plunging by 3.7 percent.

Semiconductor and software stocks also saw substantial weakness, contributing to the steep drop by the tech-heavy Nasdaq.

Outside of the tech sector, considerable weakness was visible among retail stocks, as reflected by the 2.4 percent slumped by the Dow Jones U.S. Retail Index.

Home Depot (HD) helped lead the retail sector lower, tumbling by 6.0 percent after reporting weaker than expected third quarter earnings and cutting its full-year earnings guidance.

On the other hand, oil stocks bucked the downtrend amid a sharp increase by the price of crude oil, driving the NYSE Arca Oil Index up by 1.4 percent.

Commodity, Currency Markets

Crude oil futures are plunging $1.74 to $59 a barrel after jumping $0.83 to $60.74 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,107.40, up $40.90 compared to the previous session's close of $4,066.50. On Tuesday, gold slipped $8.

On the currency front, the U.S. dollar is trading at 156.19 yen compared to the 155.50 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1576 compared to yesterday's $1.1579.

Asia

Asian stocks ended mostly lower on Wednesday, failing to hold onto early gains after a three-day sell-off as investors awaited Nvidia earnings, the release of minutes from the Federal Open Market Committee meeting held on October 28-29, and the delayed September jobs report.

The dollar index managed to hold ground amid fading hopes of Federal Reserve interest rate cuts.

Gold ticked higher as risk-off mood in financial markets helped buoy safe-haven demand for the precious metal. Oil prices fell on oversupply worries after industry data showed higher crude inventories in the United States.

China's Shanghai Composite Index edged up by 0.2 percent to 3,946.74 as China successfully raised 4 billion euros in a bond sale that attracted record demand.

Hong Kong's Hang Seng Index dipped 0.4 percent to 25,830.65, slipping for a fourth day running amid lingering concerns about artificial intelligence valuations and a deepening dispute between China and Japan.

Xiaomi plunged 4.8 percent after it warned of higher smartphone prices to due to surging memory chip costs.

Japanese markets fell for a fourth straight day as investors awaited Nvidia earnings for fresh insights into whether AI spending is delivering meaningful returns. Concerns over a sharp rise in Japanese government bond yields also weighed on markets.

The Nikkei 225 Index dipped by 0.3 percent to 48,537.70, while the broader Topix Index settled 0.2 percent lower at 3,245.58.

Among the top losers, silicon wafer manufacturer Sumco Corp. slumped 6.3 percent and IC substrate giant Ibiden tumbled 4.1 percent.

Seoul stocks ended lower for a second consecutive session after a sell-off in the world's biggest tech firms dragged global stocks to a one-month low.

The Kospi fell 0.6 percent to 3,929.51, led by losses in major tech shares amid selling by foreign investors. Samsung Electronics declined 1.3 percent and SK Hynix gave up 1.4 percent.

Australian markets ended modestly lower after a range-bound session due to shifting expectations about future interest rate changes by the Reserve Bank of Australia.

The benchmark S&P/ASX 200 Index slipped 0.3 percent to 8,447.90, with banks pacing the declines. The broader All Ordinaries Index ended down 0.2 percent at 8,721.40.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index closed 0.1 percent lower at 13,326.90 as new data signaled a continued cooling in the rental market.

Europe

European stocks were flat to slightly lower on Wednesday after closing near one-month lows the previous day due to worries about an AI bubble, dwindling rate cut hopes and investor anxiety about the economic outlook.

The British pound was subdued as official data showed U.K. consumer price inflation eased in October, driven by gas and electricity prices.

The consumer price index logged annual growth of 3.6 percent in October, slower than the 3.8 percent increase in September. However, inflation was slightly faster than economists' forecast of 3.5 percent.

The U.K.'s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.1 percent, although the German DAX Index is up by 0.2 percent.

Lloyds Banking Group shares have fallen in London. The lender has agreed to acquire fintech company Curve as part of a strategic move to enhance its digital transformation.

British Land has also declined. The landlord reported a 1.2 percent increase in the value of its U.K. property portfolio in the six months through September.

Meanwhile, industrial equipment supplier Rotork has surged. The company said it would commence a new share buyback program worth £50 million.

Swiss pharmaceutical company Roche has also moved to the upside after the European Commission granted conditional marketing authorization of Lunsumio subcutaneous.

Sage Group, an enterprise software company, has also jumped after reporting better-than-expected full-year results and launching a share repurchase program of up to 300 million-pound-sterling.

Tesco has also risen. The retailer of consumer goods has launched the third tranche of its existing £1.45 billion share buyback program, with a value of up to £350 million.

U.S. Economic News

A report released by the Commerce Department on Wednesday showed the U.S. trade deficit narrowed significantly in the month of August amid a steep drop in the value of imports.

The Commerce Department said the trade deficit shrank to $59.6 billion in August from a revised $78.2 billion in July.

Economists had expected the trade deficit to decrease to $61.0 billion from the $78.3 billion originally reported for the previous month.

The narrower trade deficit came as the value of imports plunged by 5.1 percent to $340.4 billion, while the value of exports crept up by 0.1 percent to $280.8 billion.

At 10 am ET, Federal Reserve Governor Stephen Miran is scheduled to speak on Bank Regulation and the Fed's Balance Sheet at the Bank Policy Institute and Small Business & Entrepreneurship Council.

The Energy Information Administration is due to release its report on crude oil inventories in the week ended November 14th at 10:30 am ET.

Crude oil inventories are expected to decrease by 1.9 million barrels after surging by 6.4 million barrels in the previous week.

The Treasury Department is scheduled to announce the results of this month's auction of $16 billion worth of twenty-year bonds at 1 pm ET.

At 2 pm ET, the Federal Reserve is due to release the minutes of its October 28-29 monetary policy meeting, when the central bank lowered interest rates by a quarter point.

New York Federal Reserve President John Williams is also scheduled to speak before a Making Missing Markets: Connecting Communities and Capital event at 2 pm ET.