Market Update: U.S. Stock Futures, Commodities Rise on Independence Day

U.S. stock futures edged higher Wednesday in a holiday-shortened session, though losses continued to mount in Asian markets as trade tensions remained in focus.

Futures Rise

Dow Jones futures were up 38 points by the close, settling at 24,201.00. The blue-chip index headed lower on Tuesday, with Nike (NKE) and Apple (AAPL) among the biggest losers.

The S&P 500 futures contract for September settlement rose 8.50 points to 2,721.75.

Meanwhile, the Nasdaq 100 mini futures contract gained 18.75 points to 7,042.50.

The New York Stock Exchange was closed on Wednesday for the Independence Day holiday. Normal trading hours are set to resume Thursday morning.

Wall Street is currently mired in one its most difficult five-month stretches in recent memory, with the S&P 500 and Dow just days away from setting a bearish record. It has been more than 100 days since the major indexes recorded a new record, marking the longest correction since 1984.

The so-called Trump reflation trade was disrupted in early February after a U.S. jobs report triggered fresh fears over rising inflation. Those fears have continued to build over the past few months as the Federal Reserve embarked on a faster rate-hike cycle. Compounding inflationary risks are fears of an all-out trade war between the United States and its key allies. This is the narrative that U.S. investors will return to on Thursday once the holiday ends.

Global Markets on Edge

Wednesday trading was marked by heavy volatility in global equity markets, with Chinese stocks suffering the biggest losses. Mainland China’s CSI 300 Index fell 1.3% to 3,363.75, its lowest since March 2016. In Hong Kong, the Hang Seng Index fell 1.1% to 28,241.67.

Chinese stocks are falling ahead of the planned imposition of U.S. tariffs on Friday. Up to $50 billion worth of Chinese goods will be impacted by the levies, with the Trump administration threatening more tariffs if Beijing responds.

European markets traded mixed on Wednesday, with the Euro Stoxx 50 Pr gaining 0.2% to 3,412.03. However, major indexes in London and Germany finished lower for the day.

Commodities Rise

Crude oil resumed its upward trajectory mid-week as investors braced for a global shortfall in supplies emanating from U.S. sanctions on Iran. Inventory data from the American Petroleum Institute (API) also helped to shore up crude prices.

API reported an inventory shortfall of 4.5 million barrels in the latest week following an even bigger draw of 9.23 million barrels the week before. Declining inventories are normally bullish from the perspective of oil prices.

U.S. West Texas Intermediate (WTI) for August settlement rose 19 cents, or 0.3%, to close at $74.33 a barrel. Nymex crude briefly traded above $75 on Tuesday for the first time since 2014.

Brent crude, the international futures benchmark, gained 48 cents, or 0.6%, to $78.24 a barrel.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi