U.S. Stocks May Move To The Upside In Early Trading

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Wednesday, with stocks likely to move to the upside after ending yesterday's choppy trading session little changed.

The upward momentum on Wall Street may partly reflect optimism about a potential trade between the U.S. and the European Union.

A report from the Financial Times indicated EU negotiators are closing in on a trade deal with the U.S. that would cement higher tariffs than those granted to the U.K.

Early buying interest may be somewhat subdued, however, as President Donald Trump has announced a 50 percent tariff on copper and threatened to impose higher tariffs on other sectors, including up to a 200 percent levy on pharmaceutical imports.

In a Truth Social post Tuesday evening, Trump said he will "be releasing a minimum of 7 Countries having to do with trade" this morning, with "an additional number of Countries being released in the afternoon."

Later this afternoon, the Federal Reserve is scheduled to release the minutes of its latest monetary policy meeting.

The Fed minutes may shed additional light on the outlook for interest rates ahead of the central bank's next meeting on July 29-30.

CME Group's FedWatch Tool is currently indicating a 93.3 percent chance the Fed will leave rates unchanged later this month.

Following the sharp pullback seen during Monday's session, stocks showed a lack of direction over the course of the trading day on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing narrowly mixed.

While the tech-heavy Nasdaq inched up 5.95 points or less than a tenth of a percent to 20,418.46, the S&P 500 edged down 4.46 points or 0.1 percent to 6,225.52 and the Dow fell 165.60 points or 0.4 percent to 44,240.76.

The choppy trading on Wall Street came as investors seemed reluctant to make more significant moves amid lingering uncertainty about Trump's trade policies.

Trump on Monday signed an executive order officially extending the suspension of reciprocal tariffs on U.S. trade partners.

The executive order says the 90-day suspension, which was due to expire on Wednesday, has been extended until August 1st based on "additional information and recommendations from various senior officials."

Trump told reporters on Monday that the new tariff deadline is "not 100 percent firm" but said in a Truth Social post this morning that "No extensions will be granted," adding to the uncertainty.

The postponement of the deadline comes after Trump posted several letters to world leaders on Truth Social threatening to impose higher tariffs on at least fourteen countries.

A lack of major U.S. economic data may also have kept some traders on the sidelines ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday.

Despite the lackluster performance by the broader markets, energy stocks showed a substantial move to the upside on the day.

Reflecting the strength in the sector, the Philadelphia Oil Service Index spiked by 5.3 percent and the NYSE Arca Oil Index surged by 3.4 percent.

Significant strength was also visible among semiconductor stocks, as reflected by the 1.8 percent gain posted by the Philadelphia Semiconductor Index.

Biotechnology and steel stocks also saw notable strength, while gold stocks moved sharply lower along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are inching up $0.05 to $68.38 a barrel after rising $0.40 to $68.33 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,299.20, down $17.70 compared to the previous session's close of $3,316.90. On Tuesday, gold tumbled $25.90.

On the currency front, the U.S. dollar is trading at 146.64 yen compared to the 146.58 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1706 compared to yesterday's $1.1725.

Asia

Asian stocks ended mixed on Wednesday after U.S. President Donald Trump expanded his trade war with steep new tariffs targeting copper, semiconductors and pharmaceuticals.

Gold declined below $3,300 per ounce due to a robust dollar, while oil edged up in choppy trading.

Chinese markets ended slightly lower after the release of inflation data. While CPI inflation climbed into the green for the first time since January, producer deflation deepened to its worst level in almost two years in June, data showed.

China's Shanghai Composite Index slipped 0.1 percent to 3,493.05, while Hong Kong's Hang Seng Index slumped 1.1 percent to 23,892.32, dragged down by EV and tech stocks.

Japanese markets recovered from an early slide to end modestly higher as the yen slid below 147 per dollar, logging its third straight daily loss amid rising tensions in U.S-Japan trade talks.

The Nikkei 225 Index rose 0.3 percent to 39,821.28, while the broader Topix Index closed up 0.4 percent at 2,828.16. The yen's weakness lifted automakers, with Honda Motor and Toyota rising 3.4 percent and 0.9 percent, respectively.

Yoshinoya Holdings surged 6.5 percent after the beef bowl chain reported a 9 percent increase in quarterly net profit.

Seoul stocks hit a nearly four-year high despite Trump's renewed tariff threats. The Kospi climbed 0.6 percent to 3,133.74, marking the highest closing level since September 17, 2021.

A day after announcing plans to impose a 25 percent tariff on South Korean imports, Trump said on Tuesday the country paid "very little" for the U.S. military presence and reiterated a previous demand that Seoul contribute $10 billion annually.

Hanwha Aerospace jumped 4.3 percent, LIG Nex1 soared 8.6 percent and Mirae Asset Securities added 6.8 percent.

Australian markets ended lower as Trump broadened his trade war and data showed China's industrial sector is grappling with its deepest deflationary spiral in years.

The benchmark S&P/ASX 200 Index dropped 0.6 percent to 8,538.60, led by losses in gold and mining stocks. The broader All Ordinaries Index settled 0.66 percent lower at 8,777.90.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index fell 0.7 percent to 12,768.61 and the kiwi dollar hit its lowest level in nearly two weeks as the Reserve Bank of New Zealand paused its interest rate cutting cycle but flagged more easing if price pressures abate.

Europe

European stocks have moved mostly higher on Wednesday as investors wait for an update on the U.S.-EU trade deal.

The Financial Times reported that European Union negotiators are closing in on a trade deal with the U.S. that would cement higher tariffs than those granted to the U.K.

While the U.K.'s FTSE 100 Index is up by 0.2 percent, the German DAX Index is up by 1.2 percent and the French CAC 40 Index is up by 1.3 percent.

In corporate news, Galliford Try Holdings has rallied. The construction group said it expects to report full year 2025 revenue and adjusted pre-tax profit slightly above the upper end of current market forecasts.

Energy services firm Hunting Plc has also moved sharply higher after reporting strong half-year results and launching a $40 million share repurchase program.

EssilorLuxottica has also soared after Meta Plaforms Inc. bought a minority stake in the world's largest eyewear manufacturer.

Germany's Renk has also jumped amid reports that the military vehicle parts maker is considering options for civilian industrial business.

On the other hand, WPP shares have moved sharply lower after the British advertising major trimmed its outlook for first half and fiscal 2025.

Close Brothers has also slumped. The merchant banking group said it plans to scale back its premium finance division in a bid to cut costs and focus on its offerings for businesses.

U.S. Economic News

The Commerce Department is scheduled to release its report on wholesale inventories in the month of May at 10 am ET. Wholesale inventories are expected to decrease by 0.3 percent, unrevised from the initial estimate.

At 10:30 am ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended July 4th. Crude oil inventories are expected to decrease by 2.0 million barrels after climbing by 3.8 million barrels in the previous week.

The Treasury Department is scheduled to announce the results of this month's auction of $39 billion worth of ten-year notes at 1 pm ET.

At 2 pm ET, the Federal Reserve is scheduled to release the minutes of its latest monetary policy meeting held June 17-18.