Major US equity indices opened with modest gains on Wednesday, with renewed trade uncertainty weighing on sentiment and keeping a lid on any meaningful up-move.
A Bloomberg article on Tuesday suggested that the US and China are seeking to resume trade negotiations. However, a conflicting report, saying that the Trump administration plans to impose 25%, instead of 10% tariffs on $200 billion worth of Chinese imports, held investors back from placing aggressive bets.
Reemerging worries over tariff disputes, to a larger extent, were negated by positive results from Apple – one of the world’s biggest publicly traded companies and provided a boost to the so-called FAANG group of companies and the broader technology sector.
This coupled with strong labour market data, showing that the US private sector employment increased by 219k new jobs in July, remained supportive of the positive trading sentiment during the opening hour of trade on Wednesday.
The second-quarter earnings season will continue to be in focus as market player shift focus to the outcome of a two-day FOMC meeting. The Fed is widely expected to leave interest rates unchanged but the accompanying statement will be looked upon for fresh clues over the future rate hike and eventually drive sentiment surrounding perceived riskier assets – like equities.
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