U.S. stocks look set to open on a negative note on Wednesday, with futures of the Dow Jones, S&P 500 and Nasdaq 100 indices falling, following Tuesday's higher close.
Political fallout and rising Middle East tensions dominated headlines after President Donald Trump sparked bipartisan backlash over his remarks on Iran.
The Iranian Parliament Speaker Bagher Ghalibaf mocked U.S. economic vulnerabilities on social media. "Boo! Are you ready?" Ghalibaf wrote, accompanying his response with a meme referencing rising diesel prices, 10-year Treasury yields, junk bond spreads, consumer confidence, and housing affordability, turning Scott Bessent's message about Iran's economic troubles into a jab at the U.S. economy. The geopolitical strain pushed energy prices higher, with Brent crude topping $101 following an upgraded fourth-quarter price forecast from the EIA.
Meanwhile, the 10-year Treasury bond yielded 5.30%, and the 2-year Treasury bond yielded 4.80%, at the last check. The CME Group's FedWatch tool projections show markets pricing in a 19.4% likelihood of the Federal Reserve hiking interest rates after its October meeting.
The SPDR S&P 500 ETF Trust (NYSE: SPY) and Invesco QQQ Trust ETF (NASDAQ: QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket trading on Wednesday. The SPY fell by 0.045% at $778.74, while the QQQ declined 0.35% to $757.01.
Caribou Biosciences
- Caribou Biosciences Inc. (NASDAQ: CRBU) tumbled by 35.67% in Wednesday premarket after it announced it is exploring strategic alternatives and plans to discontinue its two cell therapy programs.
- MarketDash's Edge Stock Rankings indicate that CRBU maintains a weak price trend in the long, short, and medium terms.
Penguin Solutions
- Penguin Solutions Inc. (NYSE: PENG) jumped by 5.90% in Wednesday premarket after the company reported better-than-expected fourth-quarter financial results and issued FY27 EPS guidance above estimates.
- MarketDash's Edge Stock Rankings indicate that PENG maintains a strong price trend in the short, long, and medium terms, with a poor quality score.
Applied Digital
- Applied Digital Corp. (NASDAQ: APLD) dropped 1.50% as analysts expect it to report a quarterly loss of 29 cents per share on revenue of $126.47 million.
- MarketDash's Edge Stock Rankings indicate that APLD maintains a weak price trend in the short, long, and medium terms.
Levi Strauss
- Levi Strauss & Co. (NYSE: LEVI) was 0.37% higher as analysts expect it to report quarterly earnings of 36 cents per share on revenue of $1.62 billion after the closing bell.
- MarketDash's Edge Stock Rankings indicate that LEVI maintains a weak price trend in the long, short, and medium terms, with a good value score.
Cues From Last Session
Utilities, consumer discretionary, and real estate stocks recorded the biggest gains on Tuesday, leading most S&P 500 sectors higher, while health care bucked the trend to close lower as U.S. stocks settled up, with the Dow adding around 250 points and the S&P 500 hitting a fresh record high alongside falling Treasury yields.
Insights From Analysts
Louis Navellier maintains a bullish outlook on the U.S. stock market and economy, characterizing the financial backdrop as "economic nirvana."
Navellier expects seasonal tailwinds and index realignments to drive significant institutional buying pressure. He anticipates an "early January effect" in November, driven by fund window dressing, strong earnings growth, and the addition of high-performing stocks to major indexes. Furthermore, he views the third year of the Presidential election cycle as historically the best-performing period for the S&P 500.
Regarding economic health, Navellier dismisses fears over minor fluctuations in key indices, highlighting that economic activity remains firmly in expansion territory. He points to robust components in business activity, new orders, and GDP growth, combined with confirmation that key interest rates will not be raised. Navellier also dismisses political bickering over energy prices and data center demand, framing it as temporary noise that will fade post-elections.
Ultimately, he advises investors to embrace market momentum: "a series of events have converged to propel fundamentally superior stocks higher… we can choose to embrace the positive news and prosper or get caught up in negative propaganda."
Upcoming Economic Data
Here's what investors will be keeping an eye on Wednesday.
- Minutes of the Fed's September FOMC meeting will be released by 2:00 p.m., and August's consumer credit data will be out by 3:00 p.m. ET.
Commodities, Crypto, And Global Equity Markets
Crude Oil WTI futures were trading higher in the early New York session by 0.60% to hover around $89.98 per barrel.
Gold Spot US Dollar fell 0.99% to hover around $4,122.81 per ounce. The U.S. Dollar Index spot was 0.39% higher at the 102.2350 level.
Meanwhile, Bitcoin (CRYPTO: BTC) was trading 1.9% lower at $83,694 per coin over the last 24 hours.
Asian markets traded lower on Wednesday, as Hong Kong's Hang Seng Index and Japan's Nikkei 225, alongside Australia's S&P/ASX 200, South Korea's Kospi and India's Nifty 50 declined. Stock markets in mainland China remain closed for the week for the Golden Week holiday. European markets were mostly lower in early trading.
