Stocks are in the Green to Start Wednesday’s Trading Session
Last Updated 10:00AM EST
Stock indices are in the green 30 minutes into today’s trading session. As of 10:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.5%, 1.2%, and 2.3%, respectively.
WTI crude oil remains below $100 per barrel as demand for gasoline remains lower than pre-pandemic levels, which is the result of high prices at the pump. However, physical markets remain undersupplied. As a result, the price is hovering around the high-$95 per barrel range, up roughly 0.5% from the previous close.
Meanwhile, bond yields are lower, as the U.S. 10-Year Treasury yield is now hovering around 2.77%. This represents a decrease of four basis points from the previous close.
Opposite movements can be seen with the Two-Year yield, which is now at 3.06%, meaning that the spread between the 10-Year and Two-Year U.S. Treasury yields is still negative and widening, as it currently sits at -29 basis points.
Stock futures rose in the early hours of Wednesday as investors await the Federal Reserve’s interest rate hike slated to be announced later in the day.
Futures of the Dow Jones Industrial Average (DJIA) gained 0.52%, while those of the S&P 500 (SPX) moved 1% higher, as of 5.46 a.m. EST, Wednesday. Meanwhile, the Nasdaq 100 (NDX) futures advanced significantly by 1.57%.
The after-hour market sentiment was boosted by solid quarterly results from energy technology company Enphase Energy (ENPH), which led to a 6% rise in share prices. Moreover, restaurant chain operator Chipotle (CMG) also rose around 8% in the extended trading session.
Here’s What Happened on Tuesday
Tuesday was a busy day of mixed earnings results from major blue-chip companies. Walmart’s (WMT) profit guidance cut spurred fresh concerns about reduced discretionary spending amid high inflation and recession, and this weighed heavily on retail stocks.
Moreover, Shopify’s (SHOP) workforce downsizing news put e-commerce stocks under pressure, including Amazon (AMZN), Block (SQ), and PayPal (PYPL). General Motors (GM) also lost investors after failing to meet Wall Street’s earnings expectations
Responding to these earnings releases, as well as other macroeconomic updates, the S&P 500, the Dow, and the Nasdaq 100 fell 1.15%, 0.71%, and 1.96%, respectively.
Investors are awaiting earnings reports from Boeing (BA) and Shopify before the market opens on Wednesday. Also, Qualcomm (QCOM), Ford (F), and Meta Platforms (META) are scheduled to report after the market closes for the day.
The IMF Warns of a Global Recession
Most importantly, Wednesday will see the Federal Reserve announce its latest decision on interest rates, which is most likely to be appraised by 75 basis points.
Fears of a recession are rife in the economy and the fears were solidified by the International Monetary Fund on Tuesday. The international financial body warned of a global recession in the near future, as major economies including the U.S., China, and Europe experience a sharp slowdown. Moreover, the IMF also expects growth to slow further in 2023 as central banks tighten their monetary policies to fight stubborn inflation.
The IMF now expects global growth to decelerate to 3.2% in 2022, following a 6.1% growth in 2021. This is the third time the entity cut its 2022 growth forecast. Moreover, global growth is expected to decelerate further to 2.9% in 2023, sharply below April’s projection of a 3.6% expansion.