Stock Futures Decline
U.S. stock futures are pointing lower on Wednesday as investors digest the fallout from a heated presidential debate and brace for critical inflation data. As of 03:34 ET (07:34 GMT), Dow futures have dropped by 95 points, or 0.2%, S&P 500 futures are down by 11 points, or 0.2%, and Nasdaq 100 futures have fallen by 47 points, or 0.3%.
This decline comes after both the S&P 500 and Nasdaq Composite posted gains in the previous session, marking their first consecutive days of growth since mid-August. Meanwhile, the Dow Jones Industrial Average fell, pressured by declining bank stocks. JPMorgan Chase saw a significant drop of over 5% after the bank highlighted overly optimistic earnings estimates for the coming year. Goldman Sachs also warned of a 10% drop in trading revenues for the current quarter.
Investors are now closely awaiting the August Consumer Price Index (CPI) report, a key measure of inflation, which could influence the Federal Reserve’s interest rate decisions at its upcoming meeting.
Trump-Harris Debate Provides Limited Economic Insights
The much-anticipated debate between Republican presidential candidate Donald Trump and Democratic contender Kamala Harris delivered a fiery exchange on issues including immigration and the economy. However, the debate left investors with limited information on how either candidate plans to address economic issues such as tariffs, taxes, and regulations.
Trump has proposed reducing corporate taxes and maintaining a tough stance on tariffs, which he argues will not lead to higher consumer prices. In contrast, Harris advocates for increasing corporate taxes, which analysts predict could negatively impact corporate profits but potentially mitigate inflation.
The debate also saw Harris criticize Trump’s tariff policies as a tax on the middle class, while Trump accused Harris of contributing to inflation during her tenure in the Biden administration. The Chinese yuan strengthened against the dollar following the debate, a shift attributed to trade tensions.
GameStop Shares Fall After Stock Issuance
GameStop’s stock dropped by more than 10% in after-hours trading following the company’s announcement that it will issue 20 million new shares. The video game retailer, known for its role in the meme-stock phenomenon, reported a decline in second-quarter revenue to $798.3 million from $1.16 billion a year ago. The funds from the new share issuance will be used for general corporate purposes, including potential acquisitions and investments.
Chinese Biotech Stocks Rebound
Hong Kong-listed shares of several Chinese biotechnology firms, including WuXi AppTec, Beigene, Akeso, and Sino Biopharmaceutical, rebounded on Tuesday. This recovery followed a sell-off triggered by a U.S. House bill restricting their operations in the U.S. on national security grounds. The bill, aimed at protecting personal health and genetic information, must now pass the Senate before becoming law.
Oil Prices Rebound Amid Supply Concerns
Oil prices experienced a rebound in European trading on Wednesday. Brent crude futures for November delivery rose by 1.3% to $70.11 per barrel, while West Texas Intermediate crude futures increased by 1.4% to $66.05 per barrel. This recovery follows significant losses on Tuesday, driven by disappointing Chinese import data and a reduced demand forecast from the Organization of the Petroleum Exporting Countries (OPEC). The market is also closely monitoring the impact of Hurricane Francine on Gulf of Mexico production.
