By Peter Nurse
Investing.com - U.S. stocks are seen trading mixed Wednesday, not far removed from the record highs of the previous session with investors studying worrying Covid trends, the ongoing corporate earnings season and the ADP jobs report.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 40 points, or 0.1%, S&P 500 Futures traded 3 points, or 0.1%, lower, while Nasdaq 100 Futures outperformed, climbing 6 points, or 0.1%.
The major averages posted strong gains Tuesday, with the Dow Jones Industrial Average jumping almost 280 points, or 0.8%, the Nasdaq Composite climbing 0.6% and the broad-based S&P 500 gaining 0.8%, to a new all-time closing high.
However, these indices could well hand back some of these gains Wednesday, as the country struggles with outbreaks of the highly contagious delta variant of the Covid-19 virus, particularly in the states with low vaccination uptakes.
Also of interest is the drop in bond yields, with the benchmark 10-year U.S. Treasury yielding 1.18% after Federal Reserve Governor Christopher Waller said September could be the time for the central bank to start scaling back its bond purchases.
Citi decided Wednesday to cut its recommendation on U.S. stocks to ‘neutral’, saying U.S. inflation-adjusted "real" yields will rise around 70 basis points from current record lows around -1.2% by year-end.
The earnings season continues Wednesday, with General Motors (NYSE:GM) the major company reporting early and the likes of MGM Resorts (NYSE:MGM) and Wynn Resorts (NASDAQ:WYNN) due after the bell.
Lyft (NASDAQ:LYFT) will also be in the spotlight after the ride-hailing company reported a quarterly profit three months ahead of target after the close Tuesday, while Activision Blizzard (NASDAQ:ATVI) announced the departure of a number of executives linked to a gender discrimination scandal.
Investors will also be keeping an eye on the ADP monthly report for private-sector hiring, the first of a series of employment data releases, including the weekly initial claims numbers on Thursday and Friday’s official jobs report. Analysts expect ADP to detail 695,000 people having been hired, marginally more than last month’s survey.
Elsewhere, oil prices edged lower Wednesday, continuing recent losses on concerns that mounting Covid cases in both the U.S. and China, the two biggest consumers of crude in the world, will hit fuel demand.
Providing some support was U.S. crude oil supply data from the American Petroleum Institute, released on Tuesday, which showed a draw of 879,000 barrels for the week ending Jul. 30.
Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day, for confirmation.
At 7 AM ET, U.S. crude futures traded 0.6% lower at $70.14 a barrel, while the Brent contract fell 0.4% to $72.13.
Additionally, gold futures rose 0.1% to $1,816.60/oz, while EUR/USD traded largely flat at 1.1857.