Benzinga - by Shanthi Rexaline, Benzinga Editor. Stock futures point to a muted opening on Wall Street on Wednesday following Tuesday's steep losses. The FOMC minutes along with a few earnings reports from retailers could lend direction to the market. Analysts have been sounding out a 5-10% pullback, which they see as normal after the strong first-half gains. Bond yields are coming off their recent highs and oil prices remain muted. The data dependency of the Federal Reserve could keep traders on tenterhooks, as sentiment ebbs and flows with each data.
Cues From Tuesday's Trading:
A strong July sales report proved to be the undoing of the market on Tuesday, as the data stirred concerns about another rate hike at the Federal Reserve's September rate-setting meeting.
The major indices opened lower and fell further in early trading, as traders digested a slew of data. After seeing a broadly sideways move thereafter, the averages took a leg down in late trading to close notably lower.
Among the other data, manufacturing activity in the New York region contracted by much more than expected in August, although the outlook index exuded optimism.
An index measuring sentiment among homebuilders in August fell to neutral territory.
The sell-off was broad-based, with energy, financial, utility and material stocks seeing particular weakness.
US Index Performance On Tuesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -1.14% | 13,631.05 |
| S&P 500 Index | -1.16% | 4,437.86 |
| Dow Industrials | -1.02% | 34,946.39 |
| Russell 2000 | -1.29% | 1,895.75 |
Analyst Color:
The market rally seen in the first half of the year has clearly stalled but an analyst isn’t too worried by the development.
“Right on cue, the seasonal weakness (coupled with too many bulls showing up) appears to be happening. Remember, years that were up >10% at the midpoint tended to consolidate around here,” said Carson Group’s Ryan Detrick.
This isn’t the end of the world, the analyst said, adding “but likely a pause before an end-of-year run.”
Futures Today
Futures Performance On Wednesday
Nasdaq 100: +0.10%
S&P 500: +0.02%
Dow: +0.03%
Russell 2K: 0%
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.06% to $443.14 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.11% to $366.82, according to Benzinga Pro data.
Upcoming Economic Data:
The Mortgage Bankers Association is due to release its weekly mortgage application volume data at 7 a.m. EDT. Mortgage applications volume for the week ended Aug. 4 fell a seasonally adjusted 3.1% week-over-week as the 30-year fixed mortgage rate rose to 7.09 percent, the highest level since November 2022.
The Commerce Department will release its housing starts report for July at 8:30 a.m. EDT, with economists expecting the metric to come in at 1.448 million units compared to 1.434 million units in June. Building permits, an indicator of future housing activity, may have risen from 1.441 million units to 1.463 million units.
The Federal Reserve is scheduled to release its industrial production report for July at 9:15 a.m. EDT. Industrial production is expected to rise 0.3% month-over-month, reversing the 0.5% slide in June. Manufacturing output is likely to have remained unchanged following a 0.3% drop in June.
The Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. EDT.
The Fed is scheduled to release the minutes of the July meeting at 2 p.m. EDT.
See also: Best Futures Brokers
Stocks In Focus:
- H&R Block, Inc. (NYSE:HRB) rose over 5% in premarket trading following the release of its quarterly results.
- Agilent Technologies, Inc. (NYSE:A) retreated over 3% in reaction to its earnings report.
- Target Corp. (NYSE:TGT) rose over 7% despite the company reporting a sales miss and reducing its full-year forecasts.
- JD.com, Inc. (NASDAQ:JD) and TJX Companies, Inc. (NYSE:TJX) are among the companies due to release their quarterly results before the market opens.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures edged down 0.06% to $80.94 in early European session on Wednesday after retreating 1.84% on Tuesday.
The benchmark 10-year Treasury note fell 0.045 percentage points to 4.176%.
Most Asian markets ended sharply lower, tracking the weak lead from Wall Street overnight and worried about the Chinese economy’s soft patch. The major indices in Japan, Hong Kong, South Korea and Australia all ended sharply lower, while the Indian and Malaysian markets notched up modest gains.
New Zealand’s central bank on Wednesday kept its official cash rate unchanged at 5.50% but hinted that rate hikes could resume to tame inflation.
European stocks showed tentativeness in late-morning trading on Wednesday, as traders digested some key economic data, including the eurozone GDP.
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