Stock futures traded higher on Wednesday as Wall Street tries to regain its footing after a tough first session of the year.
Futures tied to the Dow Jones Industrial Average rose 111 points, or 0.3%. S&P 500 and Nasdaq-100 futures rose 0.5% and 0.7% respectively.
Sentiment was partly boosted by encouraging inflation data from Europe, including a larger-than-expected decline in the French consumer price index and a drop in German import prices.
US stocks started 2023 on a downbeat note on Tuesday as rising interest rate concerns, high inflation and recessionary fears dashed hopes that Wall Street could start the new year on a positive note. The S&P 500 and Nasdaq Composite lost 0.4% and 0.8% respectively, while the Dow closed just below breakeven. The major indexes were also pressured by sharp falls in Apple and Tesla shares.
“U.S. stocks failed to hold on to earlier gains as restrictive policy and recession fears remained front and center for investors,” Oanda’s senior market analyst Ed Moya wrote in a note to clients on Tuesday. “Buying at a discount triggered another uptick in the bear market that didn’t last long at all.”
Investors will get more insight into what Fed members are thinking on Wednesday afternoon as minutes from the central bank’s latest policy meeting are released. Earlier in the day, the production data for job openings and labor turnover, or JOLTS, and ISM will be published.
Friday’s December jobs report will also be closely watched as it is the last reading on the labor market before the Fed meeting in February.
“It’s too early to start betting on a Fed pivot this year, and that should make this a difficult environment for stocks,” Moya said.