Mixed Open Likely For US Markets: Oil Down

Mixed open likely for U.S markets Wednesday as the key stock indexes showed varied indicators in the morning.

At 5:55 a.m. ET, Dow futures were down 64 points, indicating a lower open of more than 14 points. But futures on the S&P and Nasdaq were up.

Market participants after softening on trade concerns evidenced by Tuesday’s rally has set focus on the upcoming economic data and corporate earnings.

At the data front, retail sales, manufacturing numbers, industrial production, and business inventories are to come on Wednesday.

Earnings will be reported by Macy’s, Cisco Systems and ZTO Express.

For Dow, Tuesday was the best trading day in a month and wiped off the blues of Monday’s market mayhem.

However, the trade dispute continues to be a concern for market participants. The proposed U.S car tariffs on Europe are also in focus and president Trump will take a decision before Friday midnight.

Oil prices down

Oil prices fell Wednesday after the U.S. crude stockpiles surged and Chinese industrial output in April was below expectations.

But oil prices were supported by the tensions in the Middle East. Brent crude futures shed 40 cents to $70.84 a barrel at 0903 GMT. The U.S. West Texas Intermediate (WTI) crude futures lost 56 cents and fell to $61.22 per barrel.

The data from the American Petroleum Institute showed the U.S. crude stockpiles unexpectedly increased in the week ending May 10.

“If the EIA’s upcoming report confirms a strong build we could see that weigh on oil prices...but too many geopolitical risks remain that should keep prices supported,” Edward Moya, senior market analyst at Oanda commented.

Asian markets

Asian stocks bounced back on Wednesday after President Trump toned down trade rhetoric. This raised expectations and hopes of Beijing releasing more economic stimulus helped markets.

Asian shares were led by strong gains in Chinese equities which rebounded after two days of consecutive losses.

“Chinese stocks are mounting a rebound as they had been oversold in recent sessions. The sentiment is better as President Trump desires a compromise,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo.

The Shanghai Composite jumped one percent and shrugged off concerns about economic growth despite the weaker Chinese data. Hong Kong’s Hang Seng index was up 0.5 percent.

Japan’s Nikkei 225 rose 0.58 percent while the Topix index added 0.60 percent. South Korea’s Kospi was up 0.53 percent. Australia’s ASX 200 also gained 0.71 percent.

However, European markets traded lower on Wednesday. The pan-European STOXX 600 tumbled 0.32 percent in mid-morning trade. The momentum for a recovery rally seen in major markets after a sell-off Monday following China tariffs on U.S. goods were missing in the morning session.

Gold falls

Meanwhile, gold prices plunged from a one-month peak and retreated to a steady price as optimism surrounding trade talks between Washington and Beijing mellowed investor concerns and boosted stocks and the dollar.

Spot gold was steady at $1,296.49 an ounce by 0808 GMT while the U.S. gold futures moved up 0.1 percent to $1,297.20 an ounce.

According to Phillip Futures analysts, gold prices though eased up, may “remain supported as investors are cautious on lingering U.S.-China trade worries in the near term.”