FX.co ★ U.S. Stocks May See Further Downside In Early Trading

The stock market appears poised for further declines in early trading on Wednesday, continuing the significant drop witnessed in the prior session. Current futures indicate a lower market opening, with S&P 500 futures down by 0.3 percent.

Market sentiment remains burdened by escalating Middle East tensions following Iran's ballistic missile attack on Israel. Despite Iran's statement against pursuing a broader conflict, the attacks have driven up crude oil prices, sparking concerns over potential inflation resurgence due to higher energy costs.

Additionally, diminishing expectations for aggressive interest rate cuts by the Federal Reserve may also prompt selling pressure. This follows a report from payroll processor ADP revealing stronger-than-anticipated job growth in the private sector for September.

ADP reported a rise in private sector employment by 143,000 jobs in September, following an upwardly revised increase of 103,000 jobs in August. Economists had projected an increase of 120,000 jobs, surpassing the initially reported addition of 99,000 jobs for the previous month.

The Labor Department is scheduled to release its closely monitored employment report on Friday. Economists predict the report will show a rise of 140,000 jobs in September, comparable to the 142,000 job increase in August, with the unemployment rate expected to remain steady at 4.2 percent.

On Tuesday, stocks experienced a sharp decline early in the session but managed to recover some ground during the day, albeit closing firmly in negative territory. The Nasdaq led the decline, dropping 278.81 points or 1.5 percent to 17,910.36. The S&P 500 decreased by 53.73 points or 0.9 percent to 5,708.75, and the Dow fell 173.18 points or 0.4 percent to 42,156.97.

These decreases led the Dow and the S&P 500 to retreat from their record closing highs set on Monday.

In international markets, the Asia-Pacific region showed mixed results in Wednesday’s trading session. Japan's Nikkei 225 Index dropped by 2.2 percent, while Hong Kong's Hang Seng Index surged by 6.2 percent.

European markets also displayed mixed performance. The U.K.'s FTSE 100 Index rose by 0.1 percent, whereas the French CAC 40 Index and the German DAX Index fell by 0.1 percent and 0.6 percent, respectively.

In commodities, crude oil futures have surged by $2.04 to $71.87 a barrel, following a $1.66 rise to $69.83 a barrel on Tuesday. Gold is trading at $2,666.60 per ounce, down $23.70 from the prior session’s close of $2,690.30. On Tuesday, gold had spiked by $30.90.

On the currency market, the U.S. dollar has strengthened to 145.27 yen, up from 143.57 yen at Tuesday’s New York close. Against the euro, the dollar is trading at $1.1055, down slightly from $1.1068 on the previous day.