U.S. Stocks May Move To The Upside In Early Trading

After ending yesterday’s choppy trading session modestly higher, stocks may see further upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.

The markets may benefit from recent upward momentum, which helped lift the Dow and S&P 500 to record highs last week despite waning optimism about the Federal Reserve cutting interest rates in March.

While CME Group’s FedWatch Tool suggests the chances of March rate cut are just 20.5 percent, the Fed is still expected to begin lowering rates sometime in the coming months.

Recent upbeat economic data has seemingly reduced the likelihood of a near-term rate cut but a strong economy is still seen as a net positive for stocks.

A positive reaction to some of the latest earnings news may also generate buying interest, with shares of Enphase Energy (ENPH) soaring in pre-market trading after the solar inverter maker reported weaker than expected fourth quarter revenues but said it expects demand to improve throughout 2024.

Auto giant Ford (F) is also likely to see initial strength after reporting better than expected fourth quarter results, providing upbeat guidance for 2024 and announcing a supplemental dividend of 18 cents per share.

On the other hand, shares of Snap (SNAP) are plummeting in pre-market trading after the Snapchat parent reported mixed fourth quarter results and forecast first quarter sales below analyst estimates.

In U.S. economic news, the Commerce Department released a report this morning showing the U.S. trade deficit widened in the month of December.

The Commerce Department said the trade deficit increased to $62.2 billion in December from a revised $61.9 billion in November.

Economists had expected the trade deficit to narrow to $62.2 billion from the $63.2 billion originally reported for the previous month.

Following the significant volatility seen over the past few sessions, stocks showed a lack of…