The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a notably lower open on Wednesday, with stocks likely to give back ground after trending higher over the past several sessions.
Traders may look to cash in on the recent strength in the markets, which saw the S&P 500 close higher for six straight sessions and reach its best closing level in almost a month.
The futures saw further downside following the release of a Commerce Department report showing the U.S. economy unexpectedly shrank in the first quarter of 2025.
The report said real gross domestic product fell by 0.3 percent in the first quarter after surging by 2.4 percent in the fourth quarter of 2024. Economists had expected GDP to rise by 0.4 percent.
The unexpected dip by GDP primarily reflected an increase in imports, which are a subtraction in the calculation of GDP.
A decrease in government spending also weighed on GDP, while increases in investment, consumer spending and exports helped limit the downside.
Payroll processor ADP also released a report this morning showing private sector employment in the U.S. increased by much less than expected in the month of April.
ADP said private sector employment climbed by 62,000 jobs in April after surging by a downwardly revised 147,000 jobs in March.
Economists had expected private sector employment to jump by 125,000 jobs compared to the addition of 155,000 jobs originally reported for the previous month.
Shortly after the start of trading, the Commerce Department is due to release its report on personal income and spending in the month of March. The report includes the Federal Reserve’s preferred readings on consumer price inflation.
After showing a lack of direction early in the session, stocks moved mostly higher over the course of the trading day on Tuesday. With the upward move, the S&P 500 closed higher for the sixth straight session, reaching its best closing level in almost a month.
The major averages ended the day off their highs of the session but still firmly positive. The Dow jumped 300.03 points or 0.8 percent to 40,527.62, the S&P 500 climbed 32.08 points or 0.6 percent to 5,560.83 and the Nasdaq rose 95.18 points or 0.6 percent to 17,461.32.
The strength that emerged on Wall Street came amid positive developments on the trade front, with Commerce Secretary Howard Lutnick telling CNBC the Trump administration had reached its first trade deal.
Lutnick declined to name the country involved but said he expects their prime minister and parliament to give their approval “shortly.”
Treasury Secretary Scott Bessent also told reporters the U.S. is “very close” to a trade deal with India, has had “substantial talks” with Japan and has “the contours of a deal” with South Korea.
Earlier in the day, traders seemed reluctant to make significant moves ahead of the release of key earnings and economic news in the coming days.
Four of the “Magnificent Seven” companies – Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) – are among the companies due to report their quarterly results this week.
The Labor Department’s monthly jobs report is also likely to be in focus later this week along with the Federal Reserve’s preferred readings on consumer price inflation.
Pharmaceutical stocks showed a significant move to the upside on the day, driving the NYSE Arca Pharmaceutical Index up by 1.4 percent.
Drug giant Pfizer (NYSE:PFE) helped lead the sector higher after reporting better than expected first quarter earnings and maintaining its full-year guidance.
Notable strength also emerged among telecom stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca North American Telecom Index.
Software, networking and banking stocks also saw some strength on the day, while gold and semiconductor stocks moved to the downside.
Dow Jones, S&P, Nasdaq, Disappointing Economic Data May Lead To Pullback On Wall Street
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