U.S. stocks could open on a positive note on Wednesday after the averages maintained a cautious stance on Tuesday. Futures of all three major indices were up on Wednesday, pointing to an optimistic sentiment on Wall Street.
This is a day after the S&P 500 closed at another record high, with AI stocks and Apple Inc. (NASDAQ:AAPL) giving the benchmark index a boost. Markets brushed off rising geopolitical tensions across the world, with South Korean President Yoon declaring an emergency and enforcing martial law.
| Futures | Performance (+/-) |
| Nasdaq 100 | 0.51% |
| S&P 500 | 0.21% |
| Dow Jones | 0.42% |
| R2K | 0.07% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.22% to $605.23 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.54% to $519.68, according to Benzinga Pro data.
Cues From Last Session:
U.S. stocks closed on a mixed note on Tuesday, with the Dow Jones closing in the red while the Nasdaq and S&P 500 edged up.
Crude oil prices edged up on Wednesday after the U.S. imposed sanctions on 35 Iranian entities.
Treasury yields rose as investors waited for crucial job data to be released.
On the economic data front, the number of job openings rose by 372,000 to 7.744 million in October compared to a revised reading of 7.372 million in September and higher than market estimates of 7.48 million.
Most sectors on the S&P 500 closed on a negative note, with utilities, industrials, and financial stocks recording the biggest losses on Tuesday.
However, communication services and information technology stocks bucked the overall market trend, closing the session higher.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.40% | 19,480.91 |
| S&P 500 | 0.05% | 6,049.88 |
| Dow Jones | -0.17% | 44,705.53 |
| Russell 2000 | -0.73% | 2,416.35 |
Insights From Analysts:
Ryan Detrick, chief market strategist at Carson Group, maintained his bullish outlook on the prospects of equity markets in December. While December has traditionally been a strong one for investors, another metric shows why bears shouldn't bet against equities this month, according to Detrick.
"When the S&P 500 was up 20% or more for the year heading into the final month, December has been up nine of the past 10 times," said Detrick in his latest note.
Data shows the S&P 500 has gained over 28% since the beginning of 2024 through November, and going by past trends, December looks set to close in the green, too.
It's not just December that could be positive – Detrick's analysis shows that big gains in November set equities on a path for a rally in the new year, too.
"Do big monthly gains matter? We'd say yes, as the S&P 500 is up an average of 13.5% a year later and higher nearly 84% of the time after a calendar month gain of more than 5%."
He notes that a 5% gain in November has historically been followed by an average 13% increase the following year, occurring three out of four times. This pattern underpins Detrick's optimistic outlook.
Wells Fargo strategists also expect a bull run in 2025, giving a target of 7,007 for the S&P 500.
"On balance, we expect the Trump Administration to usher in a macro environment that is increasingly favorable for stocks at a time when the Fed will be slowly reducing rates," said Christopher Harvey and his team of strategists.
“In short, a backdrop where equities continue to rally.”
See Also: How To Trade Futures
Upcoming Economic Data
Wednesday's economic calendar is packed.
- November's data on ADP employment will be released at 8:15 a.m. ET.
- St. Louis Fed President Musalem will speak at 8:45 a.m. ET.
- The S&P final U.S. services PMI for November will be released at 9:45 a.m. ET.
- The ISM services and factory orders data for November and October, respectively, will be released at 10:00 a.m. ET.
- Fed Beige Book will be released at 2:00 p.m. ET.
Stocks In Focus:
- Marvell Technology Inc. (NASDAQ:MRVL) stock surged 14% in premarket trading on Wednesday after the company beat analyst estimates on the back of "strong demand from AI."
- Salesforce Inc. (NYSE:CRM) stock rose 13% in premarket after the company posted revenue that topped forecasts. It also raised its fiscal year revenue guidance.
- Okta Inc. (NASDAQ:OKTA) stock gained 15% in premarket after the security firm handily beat Street expectations with its third-quarter results.
- Pure Storage Inc. (NYSE:PSTG) stock rocketed 25% in premarket after the company raised its annual revenue guidance.
- Investors are awaiting earnings results from Dollar Tree, Inc. (NASDAQ:DLTR), Hormel Foods Corporation (NYSE:HRL), and PVH Corp. (NYSE:PVH) today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures surged in the early New York session, gaining 0.69% to hover around $70.42 per barrel.
The 10-year Treasury note yield edged up to 4.254%.
Major Asian markets ended mixed on Wednesday, and European markets were similarly mixed in early trading.
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Photo courtesy: Wikimedia
