By Peter Nurse
Investing.com - U.S. stocks are seen opening mixed Wednesday, in choppy trade, with tech stocks outperforming as investors seek to balance positions given a tighter-than-expected presidential election race.
At 8 AM ET (1200 GMT),S&P 500 Futures traded 21 points, or 0.6%, higher, the Dow Futures contract fell 10 points, or 0.1%, while Nasdaq 100 Futures climbed 250 points, or 2.5%.
The race for the White House remained fiercely contested Wednesday, with several battleground states still to declare thanks to the unprecedented numbers of mail-in ballots that need to be processed.
Incumbent President Donald Trump has won much of the south of the country, while Democrat Joe Biden has seemingly taken Arizona, meaning the states of Pennsylvania, Michigan and Wisconsin are now seen as key. States have until December 8 to resolve any disputes over vote counts, but Trump has already declared victory and urged an end to vote-counting, a move that the campaign of his rival Joe Biden called "illegal and outrageous".
“The election is far closer than polls had suggested,” said ING’s James Knightley, in a research note. “Animosity and the threat of legal challenges argues against a swift fiscal support package which, with the growing threat of Covid, will be a concern for markets as activity becomes increasingly constrained.”
This has resulted in volatile trade, with investors moving back into technology stocks, one of the most trusted sectors over the last few months, but one that had seen hefty recent selling.
Specifically, ride-hailing firms Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) have posted strong gains premarket after California voters passed a proposal which means these companies don’t have to classify their drivers as employees.
There are a number of economic data releases scheduled for Wednesday, including October ADP nonfarm employment and the September trade balance. But the key release will be the October ISM non-manufacturing PMI number, with the surge in coronavirus cases likely to lead to a drop in confidence in the services sector.
The evidence from Europe wasn’t encouraging, as IHS Markit's final Composite Purchasing Managers' Index, seen as a good gauge of economic health, dropped to 50.0 last month from September's 50.4. This suggested a double-dip recession is a real possibility.
Meanwhile, the earnings slate is relatively quiet Wednesday, with Hilton Worldwide Holdings (NYSE:HLT) due before the open while Qualcomm (NASDAQ:QCOM) and Allstate (NYSE:ALL) report later in the day.
Oil prices pushed higher Wednesday, with news that U.S. inventories dropped sharply last week, according to industry data, helping to counter worries about uncertainty over the election and rising coronavirus cases. Official stocks data are due later in the session.
U.S. crude futures traded 2.5% higher at $38.59 a barrel, while the international benchmark Brent contract rose 2.5% to $40.70, climbing back above the $40 level.
Elsewhere, gold futures fell 0.4% to $1,903.40/oz, while EUR/USD traded 0.1% lower at 1.1709.