The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a modestly higher open on Wednesday, with stocks likely to move back to the upside after coming under pressure over the course of the previous session.
The upward momentum on Wall Street comes despite ongoing concerns about the ongoing conflict between Israel and Iran.
Iran’s supreme leader Ayatollah Ali Khamenei threatened the U.S. with “irreparable damage” if the country engages in the clash after President Donald Trump demanded Iran’s “unconditional surrender” in a post on Truth Social on Tuesday.
However, trading may be somewhat subdued ahead of the Federal Reserve’s announcement of its latest monetary policy decision this afternoon.
While the Fed is widely expected to leave interest rates unchanged, the accompanying statement and Fed officials’ latest projections may provide clues about the outlook for rates.
Stocks moved notably lower during trading on Tuesday, giving back ground following the rebound seen in the previous session.
The Nasdaq slid 180.12 points or 0.9 percent to 19,521.09, the S&P 500 decreased 50.39 points or 0.8 percent to 5,982.72 and the Dow fell 299.29 points or 0.7 percent to 42,215.80.
The early pullback on Wall Street came as traders looked to cash in on yesterday’s strong gains amid renewed concerns about the ongoing clash between Israel and Iran.
While reports hinting at an end to hostilities contributed to a rally on Monday, news that President Donald Trump left a G7 summit early to focus on the conflict has led to worries about further escalation.
In a post on Truth Social, Trump said French President Emmanuel Macron mistakenly said he left the summit in order to work on a cease fire between Israel and Iran.
“He has no idea why I am now on my way to Washington, but it certainly has nothing to do with a Cease Fire,” Trump said. “Much bigger than that.”
Trump stepped up his attacks in a subsequent post calling for Iran’s “unconditional surrender,” leading to further downside for stocks.
The weakness on Wall Street also came following the release of a Commerce Department report showing U.S. retail sales fell by more than expected in the month of May.
The Commerce Department said retail sales slid by 0.9 percent in May after edging down by a revised 0.1 percent in April.
Economists had expected retail sales to decline by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.
Excluding a steep drop in sales by motor vehicle and parts dealers, retail sales fell by 0.3 percent in May after coming in unchanged in April. Ex-auto sales were expected to inch up by 0.1 percent.
Airline stocks showed a significant move back to the downside after rebounding on Monday, dragging the NYSE Arca Airline Index down by 3.8 percent.
Considerable weakness was also visible among housing stocks, as reflected by the 2.5 percent slump by the Philadelphia Housing Sector Index.
Pharmaceutical, telecom and healthcare stocks also saw notable weakness, while energy stocks regained ground along with the price of crude oil.
Dow Jones, S&P, Nasdaq, U.S. Stocks May Move Modestly Higher In Early Trading
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