By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Wednesday, with stocks likely to move back to the downside following yesterday’s notable rebound.
The downward momentum on Wall Street comes as the escalating U.S.-China trade war has investors paying close attention to daily developments on the currency front.
The People’s Bank of China set the midpoint for onshore yuan trading at 6.9996 per dollar, slightly stronger than the key 7.00 per dollar level but 0.4 percent weaker than 6.9683 on Tuesday.
The Chinese central bank setting the midpoint for the Chinese currency at a stronger than expected level contributed yesterday’s rally.
Negative sentiment may also be generated in reaction to disappointing earnings from Disney (DIS), with the entertainment giant slumping by nearly 5 percent in pre-market trading.
After the close of trading on Tuesday, Disney reported fiscal third quarter results that missed analyst estimates on both the top and bottom lines.
Overall trading activity may be somewhat subdued, however, as another light day on the U.S. economic front may keep some traders on the sidelines.
The economic calendar remains relatively sparse throughout the week, although a report on producer price inflation may attract attention on Friday.
Following the sell-off seen on Monday, stocks showed a strong move back to the upside during trading on Tuesday. The major averages fluctuated after an early upward move but maintained a positive bias throughout the session.
The major averages finished the session near their best levels of the day. The Dow jumped 311.78 points or 1.2 percent to 26,029.52, the Nasdaq soared 107.23 points or 1.4 percent to 7,833.27 and the S&P 500 surged up 37.03 points or 1.3 percent to 2,881.77.
The strength on Wall Street was partly due to bargain hunting, with traders picking up stocks at reduced levels after the major averages ended Monday’s trading at their lowest closing levels in two months.
News the People’s Bank of China set the midpoint for the Chinese currency at a stronger than expected level also helped ease investor jitters.
A recent drop in the value of the Chinese yuan further fueled speculation Beijing is devaluing its currency to counter President Donald Trump’s latest tariff threat.
After refusing to do so several times in the past, Treasury Secretary Steven Mnuchin officially declared China a currency manipulator on Monday.
The Treasury Department said Mnuchin will subsequently engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.
In a tweet this morning seemingly aimed at calming the markets, Trump claimed, “Massive amounts of money from China and other parts of the world is pouring into the United States for reasons of safety, investment, and interest rates!”
“We are in a very strong position. Companies are also coming to the U.S. in big numbers. A beautiful thing to watch!” he added.
Telecom stocks showed a significant move to the upside after falling sharply over the past few sessions, with the NYSE Arca North American Telecom Index jumping by 2 percent after ending Monday’s trading at its lowest closing level in well over two months.
Significant strength also emerged among biotechnology stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Biotechnology Index. The index bounced off a two-month closing low.
Software, healthcare, retail and utilities stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.
Meanwhile, energy stocks bucked the uptrend, as the price of crude oil showed another steep drop amid concerns about the outlook for global energy demand.
Dipo Olowookere 
Adedapo Adesanya