Major US equity indices opened with strong gains on Wednesday and recovered part of steep declines led by political turmoil in Italy.
The political turbulence in the Euro-zone’s third-largest economy sparked a sell-off across global equity markets on Tuesday as market participants feared that a snap election could be a de facto referendum for the country’s membership in the European Union.
However, reports of a renewed attempt to form a coalition government by Italy’s two biggest antiestablishment parties – the 5-Star Movement and League, now seems to have raised hopes that the country could avoid a fresh election and triggered a short-covering bounce on Wednesday.
Meanwhile, the US-China trade talks will also capture market attention on Wednesday, especially after the latest report that the US might continue to pursue action on some $50 billion worth of Chinese goods.
On the economic data front, the latest ADP report showed hiring decelerated in May, with private sector employers adding 178K jobs in May as against 190K anticipated. The numbers for April were also revised lower to show an addition of 163K positions, down from the original reading of 204K.
Separately, the first revision of the US growth figures showed that the economy expanded at a slightly slower pace during the first quarter of 2018 than originally reported. The Q1 GDP growth was revised lower to an annualized growth rate of 2.2% vs. 2.3% estimated earlier.
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