© Reuters
By Peter Nurse
Investing.com — U.S. stocks are seen opening higher Wednesday, regaining some ground after the previous session’s hefty losses, but confidence remains weak amid growing fears of a global economic slowdown.
At 7 AM ET (1100 GMT), the contract was up 360 points, or 1.1%, traded 38 points, or 0.9%, higher and climbed 115 points, or 0.9%.
The main Wall Street indices closed sharply lower Tuesday, with the tech-heavy leading the way, dropping almost 4% to a fresh 52-week low. The blue-chip dropped over 800 points, or 2.4%, and the broad-based fell 2.8%.
The Nasdaq is over 12% lower so far this month, while the S&P 500 has dropped almost 8% and the Dow over 4%.
Global growth fears are behind the weakness, with a prolonged outbreak of Covid-19 cases in China sparking concerns that the second largest economy in the world could suffer from a severe slowdown.
Additionally, the Federal Reserve is expected this year to aggressively raise interest rates, from the current 0.5%, to combat persistent and red-hot inflation, prompting concerns that these moves could cause the U.S. economy to contract.
“We assume conservatively that a Fed funds rate moving well into the 5% to 6% range will be sufficient to do the job,” said analysts at Deutsche Bank, in a note, adding that this “will push the economy into a significant recession by late next year.”
It’s the tech sector that has felt the brunt of these concerns, especially after last week’s disappointing Netflix (NASDAQ:) subscriber numbers.
Microsoft (NASDAQ:) stock is trading higher premarket, allaying some of those fears, after the software giant forecast double-digit revenue growth for the next fiscal year after the close Tuesday, driven by demand for cloud computing services.
On the flip side, Alphabet (NASDAQ:) stock dropped premarket after Google’s parent company missed expectations for its after the war in Ukraine hurt YouTube ad sales.
Robinhood (NASDAQ:) will also be in focus after the retail brokerage announced plans to lay off about 9% of its full-time employees, while the Wall Street Journal reported that the management of Mattel (NASDAQ:) has held talks to sell the toymaker to private equity companies.
There are also some significant earnings releases due Wednesday, from companies such as Meta Platforms (NASDAQ:), T-Mobile (NASDAQ:), and Boeing (NYSE:).
Oil prices rose Wednesday after Gazprom, Russia’s state-owned energy giant, confirmed that it has stopped supplies to Poland and Bulgaria, increasing concerns about Europe’s energy security.
It’s the first time that Russia has interrupted supplies to EU members in over 40 years of shipping natural gas, and escalates tensions between Moscow and the West as the war in Ukraine continues.
oil supply numbers from the U.S. are due later in the session, and follow Tuesday’s data from the industry body showing a build of 4.78 million barrels last week.
By 7 AM ET, U.S. crude futures traded 0.3% higher at $101.95 a barrel, while the contract rose 0.3% to $104.91. Both benchmarks gained around 3% on Tuesday.
Additionally, fell 0.3% to $1,897.90/oz, while traded 0.3% lower at 1.0607, falling to a new five-year low.
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