U.S. Stocks May See Initial Strength On News Of U.S.-China Talks

(RTTNews) - Following the pullback seen over the two previous sessions, stocks are likely to move back to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the S&P futures up by 0.3 percent.

The futures advanced following news that Treasury Secretary Scott Bessent will meet with China's lead representative on economic matters during a trip to Switzerland on Thursday.

"My sense is that this will be about de-escalation, not about the big trade deal," Bessent told Fox News. "But we've got to de-escalate, before we can move forward."

Bessent called the massive tariffs imposed by the U.S. and China the "equivalent of an embargo," adding, "We don't want to decouple, what we want is fair trade."

The markets may also benefit from a positive reaction to some of the latest earnings news, with shares of Disney (DIS) surging by 7.7 percent in pre-market trading after the entertainment giant reported better than expected fiscal second quarter results and raised its full-year guidance.

Chipmaker Advanced Micro Devices (AMD) is also seeing pre-market strength after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.

On the other hand, shares of Super Micro Computer (SMCI) are tumbling by 6.0 percent in pre-market trading after the server maker reported fiscal third quarter results that missed expectations and provided disappointing guidance for the current quarter.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve's monetary policy announcement this afternoon.

With CME Group's FedWatch Tool currently indicating a 99.0 percent chance the Fed will leave interest rates unchanged, traders will look to the accompanying statement for clues about the outlook for rates.

After ending Monday's volatile session mostly lower, stocks saw continued weakness during trading on Tuesday. The major averages all moved to the downside on the day, pulling back further off last Friday's one-month closing highs.

The major averages finished the day firmly in negative territory. The Dow slumped 389.83 points or 1.0 percent to 40,829.00, the Nasdaq slid 154.58 points or 0.9 percent to 17,689.66 and the S&P 500 fell 43.37 points or 0.8 percent to 5,606.91.

In overseas trading, stock markets across the Asia-Pacific region mostly higher on Wednesday. China's Shanghai Composite Index climbed by 0.8 percent and Australia's S&P/ASX 200 Index rose by 0.3 percent, although Japan's Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index is down by 0.1 percent, the U.K.'s FTSE 100 Index is down by 0.4 percent and the French CAC 40 Index is down by 0.6 percent.

In commodities trading, crude oil futures are climbing $0.49 to $59.58 a barrel after surging $1.96 to $59.09 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,396.20, down $26.60 compared to the previous session's close of $3,442.80. On Tuesday, gold soared $100.50.

On the currency front, the U.S. dollar is trading at 143.33 yen compared to the 142.45 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1361 compared to yesterday's $1.1370.