Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Wednesday, with stocks likely to extend the lackluster performance seen in the previous session.
Traders may remain reluctant to make significant moves as they keep an eye on renewed trade talks between the U.S., Canada, and Mexico.
Canada rejoined the talks following President Donald Trump?s announcement of a preliminary trade deal with Mexico on Monday.
In remarks to reporters on Tuesday, Canadian Foreign Affairs Minister Chrystia Freeland said ?difficult? concessions by Mexico have set the stage for productive conversations in the coming days.
Freeland said she is due to engage into detailed discussions with U.S. Trade Representative Robert Lighthizer later today.
Following the strong upward move seen on Monday, stocks turned in a relatively lackluster performance during trading on Tuesday. Despite the choppy trading, the Nasdaq and the S&P 500 crept up to new record closing highs.
The major averages eventually ended the day just above the unchanged line. The Dow edged up 14.38 points or 0.1 percent to 26,064.02, the Nasdaq ticked up 12.14 points or 0.2 percent to 8,030.04 and the S&P 500 inched up 0.78 points or less than a tenth of a percent to 2,897.52.
The choppy trading on Wall Street came as traders expressed some uncertainty about the outlook for the markets following the strength seen in recent sessions.
Traders largely shrugged off a report from the Conference Board showing an unexpected improvement in consumer confidence in the month of August.
The Conference Board said its consumer confidence index surged up to 133.4 in August from an upwardly revised 127.9 in July. Economists had expected the index to dip to 126.8 from the 127.4 originally reported for the previous month.
With the unexpected increase, the consumer confidence index reached its highest level since hitting 135.8 in October of 2000.
Stocks initially benefited from a continued positive reaction to Monday’s news of the preliminary trade agreement between the U.S. and Mexico.
President Donald Trump indicated the trade deal with Mexico is intended to replace the North American Free Trade Agreement but suggested Canada could be excluded from the new pact.
Treasury Secretary Steven Mnuchin told CNBC he remains hopeful a revamped trade deal will get done with Canada but said the U.S. is ready to go forward with the agreement with Mexico.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Telecom stocks saw substantial strength, however, with the NYSE Arca Telecom Index surging up by 1.9 percent. With the jump, the index reached its best closing level in almost four years.
Notable strength also emerged among real estate stocks, as reflected by the 1.1 percent gain posted by the Dow Jones Real Estate Index. The index ended the session at a two-year closing high.
On the other hand, gold stocks came under pressure over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 2 percent. The weakness among gold stocks came amid a modest pullback by the price of the precious metal.
Tobacco stocks also saw considerable weakness on the day, resulting in a 1.4 percent drop by the NYSE Arca Tobacco Index. The index fell to its lowest closing level in three months.
