The major U.S. index futures are pointing to a higher open on Wednesday, with stocks likely to regain ground following the sell-off seen late in the previous session.
The upward momentum on Wall Street comes after President Donald Trump indicated he would support individual stimulus measures after calling off negotiations over a broader relief package.
"The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!" Trump tweeted.
He later added, "If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?"
U.S. stocks closed sharply lower on Tuesday following a massive sell-off in the final hour after having spent much of the session in positive territory.
The Dow, which had surged to 28,354.48, ended the day with a loss of 375.88 points or 1.3 percent at 27,772.76. The Nasdaq plunged 177.88 points or 1.6 percent to settle at 11,154.60, while the S&P 500 slumped 47.66 points or 1.4 percent to 3,360.97.
U.S. President Donald Trump's tweet that he would end negotiations on a new fiscal stimulus package sent shivers and triggered the sell-off.
Trump said he has instructed his administration's negotiators to stop stimulus discussions with Democrats until after the presidential election.
Boeing (BA) tumbled nearly 7 percent. General Electric (GE), Apple (APPL), American Express (AXP), Microsoft (MSFT), and Merck (MRK) shed 2 to 3.6 percent.
Several other top stocks, including Caterpillar (CAT), Visa (V), JP Morgan Chase (JPM), Walt Disney (DIS) and Johnson & Johnson (JNJ) also ended notably lower.
Earlier in the day, Federal Reserve Chairman Jerome Powell said during a speech at the National Association for Business Economics that the U.S. economic recovery remained far from complete and the economy needs more fiscal support.
"The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods," Powell said.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone for about an hour about coronavirus relief on Monday but emerged without an agreement.
Commodity, Currency Markets
Crude oil futures are falling $0.63 to $40.04 a barrel after jumping $1.45 to $40.67 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,894.40, down $14.40 compared to the previous session's close of $1,908.80. On Tuesday, gold slid $11.30.
On the currency front, the U.S. dollar is trading at 105.90 yen compared to the 105.63 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1778 compared to yesterday's $1.1734.
Asia
Asian stocks ended mostly higher on Wednesday despite U.S. President Donald Trump ending negotiations with Democrats over additional Covid-19 stimulus.
Markets in China were closed for the National Day holiday. Hong Kong's Hang Seng index rose 262.21 points, or 1.09 percent, to 24,242.86. The private sector in Hong Kong continued to contract in September, albeit at a slower pace, the latest survey from IHS Markit showed today with a PMI score of 47.7, up from 44.0.
Japanese shares ended on a flat note after Trump halted talks for an additional stimulus package, raising fears of a slower economic recovery from the coronavirus crisis. The Nikkei average finished marginally lower at 23,422.82, while the broader Topix index closed with a positive bias at 1,646.47.
Mitsubishi Heavy Industries shed 0.7 percent after Boeing slashed its forecast for new aircraft demand. Yakult Honsha Co slumped 7.1 percent after French food group Danone said it would sell its remaining 6.6 percent stake in the Japanese probiotic yogurt maker.
Australian markets rallied after the federal government unveiled fresh fiscal stimulus measures, pushing the budget deficit to a record level to lift the economy out of recession.
"There is no economic recovery without a jobs recovery," Treasurer Josh Frydenberg told lawmakers. The benchmark S&P/ASX 200 climbed 74.30 points, or 1.25 percent, to 6,036.40, pushing the index to its highest level since September 3. The broader All Ordinaries index ended up 75.40 points, or 1.22 percent, at 6,239.60.
The big four banks rose between 2 percent and 2.6 percent on expectations that the "market friendly" budget would fuel the economic recovery.
Buy now pay later firm Afterpay gained 1.6 percent amid the prospect of increased discretionary spending. Retailer Coles Group rose 1.4 percent, Woolworths added 2 percent and Metcash jumped 3.3 percent.
Seoul stocks extended gains for the sixth day running as Trump called off talks with Democrats on a second stimulus package, but later urged Congress to "immediately approve" $25 billion in airline payroll support and $135 billion in funding for the paycheck protection program through unused funds in the CARES Act.
The benchmark Kospi inched up 21.04 points, or 0.89 percent, to 2,386.94. Market bellwether Samsung Electronics advanced 1.5 percent and pharmaceutical firm Samsung Biologics gained 1.3 percent.
Europe
European stocks were moving lower on Wednesday after U.S. President Donald Trump called an abrupt end to negotiations with Democrats over additional Covid-19 relief, saying they won't resume until after the election.
With Joe Biden's lead widening in the polls and Trump urging Congress to approve paycheck protection and airline support, the downside, however, remained limited.
In addition, investors are pinning hopes that whoever wins the November 3 presidential election will still introduce a fiscal stimulus bill.
The pan European Stoxx 600 slipped 0.1 percent to 365.36 after ending little changed with a positive bias on Tuesday.
The German DAX slid 0.3 percent, France's CAC 40 index edged down 0.1 percent and the U.K.'s FTSE 100 was marginally lower.
TUI AG shares tumbled 5 percent. The travel and tourism company said Birgit Conix, a member of the Executive Board and Chief Financial Officer, will leave the company as of 31 December 2020.
Luxury car maker BMW edged down 0.6 percent. The company reported that its third-quarter total vehicle sales increased 8.6 percent from last year.
Dialog Semiconductor rallied 2 percent after saying it expects to report higher than anticipated revenue in its third quarter.
Telefónica Deutschland fell about 1 percent and Deutsche Telekom shed 0.8 percent after they have signed a ten-year contingent contract for an early extension of existing cooperation in the fixed network.
Danone edged down half a percent after the French food group said it would sell its remaining 500 million euro ($586.60 million) stake in Japan's Yakult Honsha Co.
Total SA gave up 1.2 percent. The oil and gas company announced the acquisition of a 20 percent stake in the Eolmed floating Offshore wind farm pilot project in France.
Supermarket chain Tesco rallied 2.2 percent as it reported a higher pretax profit for the first half of fiscal 2021 on rising revenue.
EasyJet lost nearly 5 percent. The low-cost airline announced that Moya Greene DBE, non-executive director and Chair of the Remuneration Committee, has notified the Board that she will not be standing for re-election at the company's next AGM.
In economic releases, German industrial production dropped 0.2 percent on a monthly basis in August, in contrast to a 1.4 percent rise posted in July, data from Destatis revealed. Economists had forecast an increase of 1.5 percent.
On a yearly basis, industrial production decreased 9.6 percent following a 10 percent drop in July.
U.K. house prices increased at the fastest pace in more than four years in September, data from the Lloyds Bank subsidiary Halifax and IHS Markit showed.
House prices grew 7.3 percent on a yearly basis in three months to September, following a 5.2 percent rise in three months to August. On a monthly basis, house prices were up 1.6 percent but slightly slower than the 1.7 percent increase logged in August.
U.S. Economic Reports
The Energy Information Administration is scheduled to release its report on oil inventories in the week ended October 2nd at 10:30 am ET. Crude oil inventories are expected to rise by 0.3 million barrels.
At 1 pm ET, the Treasury Department is due to announce the results of its auction of $35 billion worth of ten-year notes.
Atlanta Federal Reserve President Raphael Bostic, Minneapolis Fed President Neel Kashkari and Boston Fed President Eric Rosengren are also scheduled to speak on "Racism and the Economy" at a virtual event series at 1 pm ET.
At 2 pm ET, the Federal Reserve is due to release the minutes of its latest monetary policy meeting held in September.
New York Fed President John Williams is also scheduled to serve as moderator for a discussion with Henry Kissinger at the Economic Club of New York at 2 pm ET.
At 3 pm ET, the Fed is due to release its report on consumer credit in the month of August. Consumer credit is expected to increase by $13.8 billion.
Chicago Fed President Charles Evans is scheduled to speak at a Metals Service Center Institute Economic Senior Leadership event at 4:30 pm ET.
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