The major U.S. index futures are pointing to a higher opening on Wednesday after ending the previous session modestly lower. After disappointing earnings news from Goldman Sachs (GS) weighed on the markets on Tuesday, the markets may benefit from upbeat news from Morgan Stanley (MS).
Overall trading activity on the day may be somewhat subdued, however, with lingering geopolitical uncertainty keeping some traders on the sidelines.
Stocks saw modest weakness during trading on Tuesday following the rally seen on Monday. The major averages came under pressure in morning trading but regained some ground as the day progressed.
While the major averages closed in negative territory, they were well off their worst levels of the day. The Dow fell 113.64 points or 0.6 percent to 20,523.28, the Nasdaq edged down 7.32 points or 0.1 percent to 5,849.47 and the S&P 500 dipped 6.82 points or 0.3 percent to 2,342.19.
Negative sentiment was generated in reaction to quarterly results from Goldman Sachs (GS), as the financial giant reported weaker than expected first quarter earnings on disappointing trading revenue.
Shares of Goldman Sachs moved notably lower on the news, slumping by 4.7 percent to their lowest closing level in well over four months.
Geopolitical concerns also generated some selling pressure after North Korean Vice-Foreign Minister Han Song-ryol told the BBC the communist nation plans to conduct weekly missile tests.
Han also warned that the U.S. would face “all out war” if it responded to the continued missile tests with military action.
Vice President Mike Pence has said “all options are on the table” to address North Korea’s missile and nuclear testing programs, declaring that “the era of strategic patience is over.”
Uncertainty about the outcome of the French presidential election also weighed on the markets ahead of the first round of voting on Sunday.
News that U.K. Prime Minister Theresa May has called for early elections has added to the political uncertainty in Europe.
On the U.S. economic front, the Commerce Department released a report showing a sharp pullback in new residential construction in the month of March.
The report said housing starts plunged by 6.8 percent to an annual rate of 1.215 million in March from an upwardly revised 1.303 million in February. Economists had expected housing starts to drop by 2 percent.
Meanwhile, the Commerce Department said building permits, an indicator of future housing demand, jumped by 3.6 percent to a rate of 1.260 million in March from a revised 1.216 million in February. Building permits had been expected to climb by 3.1 percent.
A separate report from the Federal Reserve showed that industrial production increased in line with economist estimates in March, reflecting a substantial rebound in utilities output.
The report said industrial production climbed by 0.5 percent in March after inching up by 0.1 percent in February. The increase in production matched the consensus estimate.