Dow Jones, S&P, Nasdaq, News Of U.S.-China Talks May Lead To Initial Strength On Wall Street

The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a higher open on Wednesday, with stocks likely to move back to the upside following the pullback seen over the two previous sessions.

The futures advanced following news that Treasury Secretary Scott Bessent will meet with China’s lead representative on economic matters during a trip to Switzerland on Thursday.

“My sense is that this will be about de-escalation, not about the big trade deal,” Bessent told Fox News. “But we’ve got to de-escalate, before we can move forward.”

Bessent called the massive tariffs imposed by the U.S. and China the “equivalent of an embargo,” adding, “We don’t want to decouple, what we want is fair trade.”

The markets may also benefit from a positive reaction to some of the latest earnings news, with shares of Disney (NYSE:DIS) surging by 7.7 percent in pre-market trading after the entertainment giant reported better than expected fiscal second quarter results and raised its full-year guidance.

Chipmaker Advanced Micro Devices (NASDAQ:AMD) is also seeing pre-market strength after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.

On the other hand, shares of Super Micro Computer (NASDAQ:SMCI) are tumbling by 6.0 percent in pre-market trading after the server maker reported fiscal third quarter results that missed expectations and provided disappointing guidance for the current quarter.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

With CME Group’s FedWatch Tool currently indicating a 99.0 percent chance the Fed will leave interest rates unchanged, traders will look to the accompanying statement for clues about the outlook for rates.

After ending Monday’s volatile session mostly lower, stocks saw continued weakness during trading on Tuesday. The major averages all moved to the downside on the day, pulling back further off last Friday’s one-month closing highs.

The major averages finished the day firmly in negative territory. The Dow slumped 389.83 points or 1.0 percent to 40,829.00, the Nasdaq slid 154.58 points or 0.9 percent to 17,689.66 and the S&P 500 fell 43.37 points or 0.8 percent to 5,606.91.

Ongoing trade uncertainty continued to weigh on the markets following recent strength, which saw the S&P 500 close higher for nine straight sessions before yesterday’s pullback.

While Treasury Secretary Scott Bessent told CNBC on Monday the U.S. is “very close to some deals,” the lack of any concrete developments from trade talks has kept investors on edge.

During a meeting with Canadian Prime Minister Mark Carney, President Donald Trump expressed frustration with the media’s repeated questions about when the U.S. will sign new trade deals even as he claimed he “could sign 25 deals right now.”

“I wish they’d … stop asking how many deals are you signing this week?” Trump said. “Because one day we’ll come and we’ll give you 100 deals.”

In trade-related economic news, the Commerce Department released a report this morning showing the U.S. trade deficit spiked by much more than expected in the month of March.

The report said the trade deficit soared to a record high $140.5 billion in March from a revised $123.2 billion in February.

Economists had expected the trade deficit to widen to $129.0 billion from the $122.7 billion originally reported for the previous month.

The much bigger than expected trade deficit came as the value of imports surged by 4.4 percent to $419.0 billion, while the value of exports crept up by 0.2 percent to $278.5 billion.

Biotechnology stocks showed a significant move to the downside on the day, with the NYSE Arca Biotechnology Index plunging by 5.1 percent after ending the Monday’s trading at its best closing level in a month.

Vertex Pharmaceuticals (NASDAQ:VRTX) helped lead the sector lower, plummeting by 10.0 percent after reporting weaker than expected first quarter results.

Considerable weakness was also visible among pharmaceutical stocks, as reflected by the 3.7 percent slump by the NYSE Arca Pharmaceutical Index.

Healthcare, transportation and housing stocks also saw notable weakness, while gold stocks extended Monday’s rally amid a continued surge by the price of the precious metal.