© Reuters
Investing.com — U.S. stock futures traded largely flat Wednesday, with the recent rally pausing in the final trading week of the year.
By 06:05 ET (11:05 GMT), the contract was up 15 points, or 0.1%, traded 1 point higher and climbed 5 points, or 0.1%.
The three main indices closed higher on Tuesday as traders returned to Wall Street following the Christmas break, although volumes were low. The blue-chip gained 160 points, or 0.4%, the broad-based also rose 0.4% and the tech-heavy climbed 0.5%.
These gains add to what has already been a strong year, as investors gained confidence that the Federal Reserve would start cutting interest rates next year, having largely succeeded in getting inflation under control without causing a recession.
With just three sessions left in 2023′s trading year, the DJIA and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively, while the Nasdaq Composite has jumped an impressive 44%.
Quiet economic calendar
The economic calendar is largely empty Wednesday, with the the only data of note.
However, softer-than-expected inflation data released on Friday saw traders ramp up bets that the central bank will begin cutting interest rates by as soon as March 2024.
The CME Group’s Fed Watch tool shows markets pricing in an over 70% chance the Fed will cut rates by 25 basis points in March.
Tesla to roll out new Model Y from Shanghai
In the corporate sector, Tesla (NASDAQ:) is likely to be in the spotlight after Bloomberg reported that the electric car manufacturer is preparing to launch a revamped version of its Model Y from its Shanghai plant.
Additionally, Israel’s government has agreed to give Intel (NASDAQ:) a $3.2 billion grant for a new $25 billion chip plant it plans to build in southern Israel, in what would be the largest investment ever by a company in Israel.
Oil prices retreat ahead of API data
Oil prices edged lower Wednesday, after the previous session’s sharp gain as traders continue to monitor shipping in the Red Sea amid broader Middle East tensions.
By 06:05 ET, the futures traded 0.6% lower at $75.09 a barrel, while the contract dropped 0.5% to $80.41 per barrel.
Both the benchmark contracts gained over 2% on Tuesday as further attacks by Yemen’s Iran-backed Houthi militia on ships in the Red Sea prompted more fears of shipping disruptions.
However, major shipping firms such as Maersk and France’s CMA CGM have resumed passage through the Red Sea following the deployment of a multinational task force to the region, while Germany’s Hapag-Lloyd is expected to decide whether to resume shipments later Wednesday.
The crude market also received a boost Tuesday with the news that the United States has agreed to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve.
The Biden administration had conducted sales last year, including a record one of 180 million barrels, to help control oil prices after Russia’s invasion of Ukraine.
The first weekly estimate of U.S. crude stockpiles, from the industry body , is due later in the session, a day later than usual following the Christmas holiday.
Additionally, rose 0.4% to $2,076.85/oz, while traded 0.1% higher at 1.1052.
(Oliver Gray contributed to this item.)