Top 5 Things to Know In the Market on Wednesday

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Top 5 Things to Know In the Market on Wednesday
Credit: © Reuters.

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, May 10:

1. Trump’s abrupt dismissal of FBI director weighs on risk appetite

Gold prices were higher on Wednesday, bouncing off the prior session's eight-week low after U.S. President Donald Trump abruptly fired FBI Director James Comey in a move that shocked Washington.

Rekindled fears that North Korea could be gearing up for another weapons test also supported the safe haven precious metal.

Democrats immediately accused Trump of having political motives, as Comey had been leading his agency's investigation into alleged Russian meddling in the 2016 U.S. presidential campaign and possible collusion with Trump's campaign.

Market analysts warned that Comey's firing could create a sideshow that may delay the Trump Administration's plans on tax reform and infrastructure spending, while some experts suggested investors were spooked by yet another example of Trump’s unpredictable behavior which puts markets on edge.

Comex gold futures rose around $7.70, or about 0.63%, to $1,223.80 a troy ounce by 5:56AM ET (9:56GMT), as market players piled in on the back of risk-off sentiment.

2. Global stocks mixed as Comey’s termination hits western markets

U.S. stock futures pointed to a lower open on Wednesday as investors moved risk off the table in light of Trump’s abrupt dismissal of Comey. At 5:57AM ET (9:57GMT), the blue-chip Dow futures lost 0.24%, S&P 500 futures fell 0.17% and the Nasdaq 100 futures slipped 0.09%.

Elsewhere, European stocks moved lower on Wednesday, showing caution as fresh U.S. political worries dampened market sentiment and while waiting for European Central Bank (ECB) president Mario Draghi later in the day.

Earlier, Asian stocks edged higher for a third consecutive day on Wednesday as investors focused on strong corporate earnings.

3. Oil jumps 1% on large inventory draw

Oil prices traded around 1% higher on Wednesday, bouncing back from the prior session's losses after industry data overnight showed a sizable decline in U.S. oil stockpiles.

After markets closed Tuesday, the American Petroleum Institute (API) said that U.S. oil inventories fell by 5.79 million barrels in the week ended May 5.

The U.S. Energy Information Administration (EIA) will release its official weekly oil supplies report at 10:30AM ET (14:30GMT) Wednesday amid expectations for a draw of 1.786 million barrels. There are often sharp divergences between the API estimates and the official figures from EIA.

U.S. crude oil futures gained 1.02% to $46.35 at 5:58AM ET (9:58GMT), while Brent oil traded up 0.88% to $49.16.

4. Disney set to weigh on Dow, Apple pulls back

Walt Disney (NYSE: DIS ) appeared set to weigh on the Dow as a decline in subscribers and higher programming costs at cash-cow ESPN caused the entertainment giant’s revenues to miss consensus. Shares were down nearly 3% in the after hours market when the numbers were released after Tuesday’s close.

Pre-market trade suggested Apple (NASDAQ: AAPL ) would be unable to come to the rescue of the blue chip index. Shares were off 0.6% as investors looked set to take profits a day after the iPhone maker became the first company to top $800 billion in market capitalization.

In other earnings out Wednesday, Mylan (NASDAQ: MYL ), Time Inc (NYSE: TIME ) and Wendy’s (NASDAQ: WEN ) are among firms reporting before the opening bell, while particular attention will be paid to the likes of Snap Inc (NYSE: SNAP ) or Whole Foods Market (NASDAQ: WFM ) after the close.

5. Draghi may help lift euro back to 6-month highs

ECB president Mario Draghi is set to speak on monetary policy before the Dutch House of Representatives at 7:00AM ET (11:00GMT).

Though the next policy decision will not be made until June 8, market players will keep their ears open for any hints on Draghi’s plans to either maintain accommodation or to contemplate its removal.

EUR/USD has been drifting lower after hitting 1.1021 on Monday, the highest level since early November, so investors will gauge Draghi’s commentary on recent economic improvements in the euro zone to decide if the single currency can claw back some lost ground.

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