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Investing.com — U.S. stock futures weakened Wednesday, handing back some of the recent gains as investors awaited the release of fresh labor market data for clues of future Federal Reserve’s action.
By 06:40 ET (10:40 GMT), the contract was down 20 points, or 0.1%, traded 3 points, or 0.1%, lower and dropped 23 points, or 0.2%.
Wall Street’s main indices closed with strong gains Tuesday, the third consecutive winning session, with the blue-chip rising over almost 300 points, or 0.9%, while the broad-based climbed 1.5% and the tech-heavy 1.7%.
ADP private payrolls to confirm loosening labor market
Tuesday’s gains followed the release of data which showed employers reported fewer than expected , a sign that there might be some loosening in the tight labor market.
This boosted the hopes of investors that the Federal Reserve will end its rate-hiking cycle as soon as its next meeting in September, as economic growth slows and inflation is reined in.
The widely-watched official for August is due out on Friday, but ahead of this comes the reading later in the session. This is expected to show 195,000 new jobs were created in August, a drop from the 324,000 in July.
Additionally, the second reading of the latest data is expected to confirm that the U.S. economy grew 2.4% in the second quarter, an improvement from 2.0% the prior quarter.
German inflation proving sticky
The economic news out of Europe, a major trading region for the biggest U.S. companies, was pretty dire Wednesday.
Inflation rose in four of six key German states in August, casting doubt on a continuation of a national downward trend in the eurozone’s most important economy, and increasing the pressure on the European Central Bank to continue hiking interest rates.
At the same time, eurozone was weaker than expected in August, continuing a steady decline since the start of the year.
HP slips on slowing PC demand
On the earnings front, Jack Daniel’s whiskey owner Brown Forman (NYSE:), as well as tech firms Salesforce (NYSE:) and Crowdstrike (NASDAQ:) are scheduled to report their latest quarterly reports on Wednesday.
Elsewhere, HP (NYSE:) stock slumped premarket as the personal computer maker trimmed its annual forecast due to slowing demand.
Crude gains after massive U.S. inventory draw
Oil prices rose Wednesday, extending recent gains after industry data pointed to a hefty draw in stockpiles, adding to concerns about a hurricane in the Gulf of Mexico.
Data from the , released late Tuesday, showed that crude stocks fell by over 11 million barrels last week, suggesting healthy demand ahead of the Labor Day holiday that usually marks peak summer demand.
The official data from the is due later in the session, for confirmation.
Additionally, Hurricane Idalia has strengthened into a Category 4 hurricane, the U.S. National Hurricane Center said on Wednesday, as it continues to head towards Florida, disrupting production in the Gulf of Mexico.
The offshore Gulf of Mexico accounts for about 15% of U.S. oil output and about 5% of production, according to the Energy Information Administration.
By 06:40 ET, the U.S. crude futures traded 0.7% higher at $81.72 a barrel, while the contract climbed 0.6% to $85.39. Both contracts rose over 1% on Tuesday.
Additionally, traded largely flat at $1,965.35/oz, while traded 0.1% higher at 1.0888.
(Oliver Gray contributed to this item.)
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