Stock futures traded higher on Wednesday as Wall Street tries to regain its footing after a tough first session of the year.
Futures contracts linked 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 boosted in part by encouraging inflation data from Europe, including a larger-than-expected drop in the French consumer price index and lower German import prices.
U.S. stocks started 2023 on a pessimistic note on Tuesday as worries about rising rates, high inflation and recession 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. Major indexes were also under pressure from sharp declines in Apple and Tesla shares.
“U.S. stocks were unable to hold onto earlier gains as tight policy and recession fears remained front and center for investors,” Oanda senior market analyst Ed Moya wrote on Tuesday. , in a note to customers. “The discounted buy triggered another bear market bounce that didn’t last long at all.”
Investors will get more insight into what Fed members are thinking on Wednesday afternoon when minutes from the central bank’s latest policy meeting are released. Earlier today, the Job Openings and Labor Turnover Survey, or JOLTS, and ISM manufacturing data are due out.
Friday’s December jobs report will also be watched closely as it is the last labor market reading ahead of the Fed meeting in February.
“It’s too early to start betting on a Fed pivot this year and that should make this environment challenging for equities,” Moya said.