S&P 500 futures inched lower Wednesday as traders digested a broad market rally in the previous session. S&P 500 and Nasdaq-100 futures dipped 0.2% and 0.4%, respectively. Dow Jones Industrial Average futures were little changed. Chip stocks fell in the premarket after The Wall Street Journal reported that the U.S. was considering new export restrictions to China. Nvidia shares lost 4%, while AMD fell more than 3%. the iShares Semiconductor ETF (SOXX) slid 1.5%. The Dow on Tuesday posted its first positive session in seven, with the index closing 0.63% higher. Meanwhile, the S&P 500 and the Nasdaq Composite jumped more than 1% each, buoyed by a resurgence in tech stocks after last week’s selloff. Investors are preparing to close out the best first half for the Nasdaq in 40 years, as they ride a wave of optimism around artificial intelligence that has significantly buoyed a handful of mega-cap tech stocks. The S&P 500 and Nasdaq Composite are higher this year by 14% and 29%. “We’re sequencing this series of higher highs and higher lows. I wouldn’t call it a momentum market, maybe we’re starting to shift to that a little bit, but certainly it’s a trend market,” Jeff deGraaf, chairman at Renaissance Macro Research, said Tuesday on CNBC’s “Closing Bell.” He noted the leadership in cyclical sectors such as technology and industrials, saying that they are positive indicators. “Those are pretty good, bulletproof indications that you’re in a bull market,” deGraaf added. Federal Reserve Chair Jerome Powell will speak Wednesday morning before a policy panel at the European Central Bank Forum on Central Banking in Sintra, Portugal. Powell will be joined by Bank of England Governor Andrew Bailey, European Central Bank President Christine Lagarde and Bank of Japan Governor Kazuo Ueda. The event will be moderated by CNBC’s Sara Eisen and begins at 9:30 a.m. ET. Markets will be looking for more clues from Powell about the future of U.S. economic policy. Recently, the Fed chair said he expects additional interest rate increases on the way to battle inflation, though he thinks the central bank can do so at “a more moderate pace.” Asia-Pacific markets were mixed as the region digests May inflation figures out of Australia and China releases its industrial profits for May. In Australia, the S&P/ASX 200 climbed 1.10% to close at 7,196.5, with the index seeing its largest one-day gain since April 11. In Japan, the Nikkei 225 rebounded more than 2% after three straight days of losses, crossing the 33,000 mark and closing at 33,193.99. The Topix also surged almost 2%, ending the day at 2,298.6. In contrast, South Korea’s Kospi lost 0.67% to end at 2,564.19, while the Kosdaq was down 0.82%, with both indexes recording a second straight day of losess. Hong Kong’s Hang Seng index reversed earlier losses to climb 0.3% in its final hour of trade. However, mainland Chinese markets were in negative territory as China’s industrial profits sank 18.8% in first five months of 2023. The Shanghai Composite was down marginally to end the day at 3,189.38, while the Shenzhen Component saw a larger loss of 0.47%, closing at 10,926.32. Oil gave up its earlier gains on Wednesday as worries over further interest rate hikes and slowing demand offset support from an industry report showing a larger-than-expected drop in U.S. crude inventories. Benchmark Brent crude prices are down more than 15% this year as rising interest rates hit investor appetite, while China’s economic recovery has faltered after several months of softer-than-expected consumption and other data. Brent was last down 44 cents, or 0.61%, to $71.82 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped 46 cents to $67.24. Gold prices slipped to a more than three-month low on Wednesday after upbeat U.S. economic data cemented expectations of more rate hikes this year as investors positioned for a speech by Federal Reserve Chair Jerome Powell’s later in the day. Spot gold fell 0.33% to $1,907.69 per ounce, having hit its lowest since March 16 earlier in the session. U.S. gold futures dipped 0.37% to $1,916.60.
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