Equities
North American markets opened higher and other global stocks were mixed as traders reacted to news of a trade meeting between the U.S. and China awaited the first U.S. Federal Reserve rate decision since tariffs prompted market turbulence last month.
Wall Street’s main indexes opened slightly higher on Wednesday. The Dow Jones Industrial Average rose 127.1 points at the open to 40,956.08. The S&P 500 rose 7.3 points at the open to 5,614.18, while the Nasdaq Composite rose 17.2 points to 17,706.827.
The Toronto Stock Exchange’s S&P/TSX composite index was up 0.1 per cent at the open, at 24,999.34 points.
On Wall Street, markets are digesting earnings from Uber Technologies Inc., Walt Disney Co. and drug maker Novo Nordisk ADR.
In Canada, investors are getting results from miners Barrick Gold Corp. and Nutrien Ltd.; utility companies Fortis Inc., TransAlta Corp. and Canadian Utilities Ltd.; insurers Manulife Financial Corp. and Great-West Lifeco Inc.; software company Kinaxis Inc.; energy company Tourmaline Oil Corp.; CCL Industries Inc.; and WSP Global Inc.
The U.S. dollar rose with along on strong sentiment about the U.S.-China trade meeting set for the weekend in Switzerland, with investors hoping the talks with de-escalate tensions between the world’s two largest economies.
Focus will be on the U.S. Federal Reserve later in the session. The central bank will decide on interest rates for the first time since U.S. tariffs started whipsawing financial markets, and since tensions rose between U.S. President Trump and Federal Reserve Chair Jerome Powell over rate policy direction.
“The Fed chair will need to balance guiding markets about the future of monetary policy and defending the Fed from pressure from the administration,” said Kathleen Brooks, research director at trading platform XTB.
“A hawkish lean from the Fed could spook markets and remind us that the recent market rally was a correction in a downtrend,” Brooks said, adding that markets were expecting a hawkish lean from Powell.
Expectations for rate cuts were dialled down after relatively solid U.S. labor data last week.
The pan-European STOXX 600 was down 0.4 per cent by early afternoon. Britain’s FTSE 100 lost 0.41 per cent, Germany’s DAX was down 0.11 per cent and France’s CAC 40 was in the red 0.59 per cent.
In Asia, Japan’s Nikkei closed 0.14 per cent lower, while Hong Kong’s Hang Seng gained 0.13 per cent.
Commodities
Oil prices rose for a second session on positive investor sentiment about the U.S.-China trade talks as well as signs of lower U.S. shale output.
Brent crude futures climbed 41 US cents a barrel to US$62.56 a barrel by while West Texas Intermediate crude was up 48 cents at US$59.57 a barrel.
Both benchmarks had plunged to four-year lows this week after OPEC+ decided to speed up output increases, stoking fears of oversupply at a time when U.S. tariffs have increased concerns about demand.
Still, some U.S. producers have signalled that they would cut spending, cautioning that the country’s oil output may have peaked. This is contributing to the uptick in the market, analysts said.
“It’s also worth noting that the OPEC production increase at the weekend was fully priced in,” Saxo Bank analyst Ole Hansen said.
In other commodities, spot gold was down 1.2 per cent at US$3,388.49 an ounce, as news of trade talks weighed on the safe-haven metal.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.44 US cents to 72.66 US cents in early trading. The Canadian dollar was up about 2.08 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, gained 0.2 per cent to 99.45.
The euro lost 0.04 per cent to US$1.1365. The British pound lost 0.1 per cent to US$1.3355.
In bonds, the yield on the U.S. 10-year note was relatively flat at 4.313 per cent ahead of the North American opening bell.
Economic news
Japan services and composite PMI
Euro zone retail sales
Germany factory orders
(2 p.m. ET) U.S. Fed announcement with chair Jerome Powell’s press briefing to follow.
(3 p.m. ET) U.S. consumer credit for March.
With Reuters and The Canadian Press