The major U.S. index futures are pointing to a modestly lower opening on Wednesday, with stocks likely to extend the pullback seen late in the previous session.
A negative reaction to earnings news from big-name companies like Boeing (BA) and Caterpillar (CAT) may contribute to initial weakness on Wall Street.
Boeing and Caterpillar both reported weaker than expected third quarter earnings, with Caterpillar also cutting its full-year outlook due to weak demand for construction and mining equipment.
Disappointing guidance from Texas Instruments (TXN) may also weigh on tech stocks, as the chipmaker cited the impact of ongoing uncertainty about trade.
Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.
Traders may look ahead to the release of reports on durable goods orders, new home sales, and weekly jobless claims on Thursday.
Further developments on the Brexit and U.S.-China trade deal fronts could also have a significant effect on the markets as the day progresses.
Meanwhile, Ford (F), Microsoft (MSFT), and Tesla (TSLA) are among the companies due to report their quarterly results after the close of trading.
Stocks turned in a lackluster performance throughout much of the trading day Tuesday but came under pressure in the latter part of the session. The major averages all pulled back into negative territory, with the tech-heavy Nasdaq showing a notable drop.
After ending the previous session at its best closing level in a month, the Nasdaq slid 58.69 points or 0.7 percent to 8,104.30. The S&P 500 also pulled back off a one-month closing high, falling 10.73 points or 0.4 percent to 2,995.99, while the Dow dipped 39.54 points or 0.2 percent to 26,788.10.
The late-day pullback may have reflected renewed uncertainty about Brexit after U.K. lawmakers voted to move forward with legislation related to Britain's withdrawal from the European Union but then voted against a shortened time frame to review the bill.
Members of Parliament narrowly voted against the limited time frame, which would have provided just three days to evaluate the legislation.
The vote suggests lawmakers will not meet an October 31st deadline, setting the stage for another extension by the EU to avoid a no-deal Brexit.
The choppy trading seen earlier in the session came as traders digested the latest batch of earnings news, with mixed results from some big-name companies pulling the markets in opposite directions.
Shares of McDonald's (MCD) came under pressure after the fast food giant reported third quarter results that missed analyst estimates on both the top and bottom lines.
Delivery giant UPS (UPS) also saw notable weakness after reporting third quarter earnings that beat expectations but on weaker than expected sales.
Meanwhile, shares of Procter & Gamble (PG) moved notably higher after the consumer products giant reported better than expected fiscal first quarter results.
Fellow Dow component United Technologies (UTX) also moved to the upside after reporting third quarter results that beat estimates and raising its full-year guidance.
On the U.S. economic front, the National Association of Realtors released a report showing existing home sales pulled back by much more than anticipated in the month of September.
NAR said existing home sales plunged by 2.2 percent to an annual rate of 5.38 million in September after jumping by 1.5 percent to an upwardly revised 5.50 million in August.
Economists had expected existing home sales to drop by 0.7 percent to a rate of 5.45 million from the 5.49 million originally reported for the previous month.
Despite the pullback by the broader markets, most of the major sectors ended the day showing only modest moves.
Software stocks showed a significant move to the downside, however, with the Dow Jones U.S. Software Index slumping by 1.8 percent.
The index continued to give back ground after ending last Tuesday's trading at it best closing level in well over two months.
On the other hand, energy stocks moved notably higher, benefiting from a sharp increase by the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 2.4 percent and the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index rose by 1.4 percent and 1.2 percent, respectively.
Commodity, Currency Markets
Crude oil futures are sliding $0.60 to $53.88 a barrel after jumping $0.97 to $54.48 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,494.30, up $6.80 compared to the previous session's close of $1,487.50. On Tuesday, gold edged down $0.60.
On the currency front, the U.S. dollar is trading at 108.50 yen compared to the 108.49 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1123 compared to yesterday's $1.1125.
Asia
Asian stocks ended broadly lower on Wednesday amid renewed Brexit uncertainty after British lawmakers rejected Prime Minister Boris Johnson's plan to fast track his Brexit deal through parliament.
After suffering another humiliating defeat, Johnson said it was up to the EU to decide whether it wanted to delay Brexit and for how long.
China's Shanghai Composite Index dropped 12.76 points, or 0.4 percent, to 2,941.62, as investors kept an eye on developments surrounding Brexit and U.S.-China trade talks. Hong Kong's Hang Seng Index slid 219.47 points, or 0.8 percent, to 26,566.73.
Hong Kong's consumer price index rose 3.2 percent year-on-year in September, slower than the 3.5 percent increase in August, a government report showed. The latest inflation rate was the lowest since May, when it was 2.8 percent.
Meanwhile, Japanese shares eked out modest gains as the yen held stable and investors awaited the start of the corporate earnings season. The Nikkei 225 Index rose 76.48 points, or 0.3 percent, to 22,625.38, while the broader Topix closed 0.6 percent higher at 1,638.14.
Market heavyweight SoftBank Group lost 2.5 percent after WeWork accepted a financial rescue package from the former. Tech stocks edged lower, with Tokyo Electron falling 4.1 percent and Screen Holdings declining 1.8 percent.
Australian markets recovered from an early sell-off to end nearly flat. The benchmark S&P/ASX 200 Index inched up 0.90 points to 6,673.10, while the broader All Ordinaries Index edged down 0.40 points to 6,778.20.
Banks ended narrowly mixed, while global miner Rio Tinto edged up 0.4 percent after warning it may close an unprofitable aluminum smelter on New Zealand's South Island.
Energy stocks finished broadly higher, with Santos rising 1.7 percent after oil prices rose almost 2 percent overnight.
WiseTech Global soared 8.5 percent after the logistics software firm issued a detail rebuttal of allegations against the company by short-seller J Capital Research.
Bubs Australia fell over 2 percent after the infant formula maker expanded the role of Dennis Lin by making him executive chairman.
Seoul stocks fell on profit taking after sharp gains in the previous session. The benchmark Kospi slid 8.24 points, or 0.4 percent, to 2,080.62 after climbing 1 percent in the previous session.
Shares of Samsung BioLogics soared 8.3 percent amid bets the drugmaker would win a contract manufacturing deal from Biogen.
Europe
European stocks are turning in a mixed performance on Wednesday as the political deadlock over Brexit drags on and tech stocks fall after a revenue warning from Texas Instruments.
A general election could be in the cards after U.K. lawmakers supported the prime minister's deal to withdraw the U.K. from the EU but then rejected a limited time frame for reviewing the legislation.
Prime Minister Boris Johnson has vowed to push for an election if EU leaders sanction a Brexit extension of up to three months.
While the French CAC 40 Index is down by 0.5 percent, the German DAX Index is just above the unchanged line and the U.K.'s FTSE 100 Index is up by 0.3 percent.
Infineon Technologies and STMicroelectronics have come under pressure after U.S.-based Texas Instruments warned about a slowdown in the global tech industry.
Texas Instruments gave a weaker than expected forecast for the current quarter, saying customers are getting wary of ongoing trade uncertainties with China.
Heineken has also slumped after the world's second-largest brewer forecast its operating profit this year would be at the lower end of its previous guidance
On the other hand, French grocery retailer Carrefour Group has advanced. After reporting slower sales growth in the third quarter, the company said that its overhaul plan aimed at boosting earnings was on track.
Peugeot shares have also jumped. Groupe PSA, the owner of Peugeot and Opel brands, reported that its third-quarter revenue increased 1 percent despite headwinds, including unfavorable currency swings.
Gold miner Centamin has also shown a strong move to the upside after saying it is still targeting the bottom end of 2019 guidance.
Swiss engineering firm ABB has soared despite the company posting lower third-quarter profit and revenue, hit by weaker market conditions in its robotics and automation business.
In economic news, French manufacturing confidence weakened to the lowest level in more than four years in October, survey results from the statistical office Insee showed.
The manufacturing sentiment index fell to 99 in October from 102 in September. This was the lowest reading since March 2015.
U.S. Economic Reports
The Energy Information Administration is scheduled to release its report on oil inventories in the week ended October 18th at 10:30 am ET.
Oil inventories are expected to rise by 1.7 million barrels after jumping by 9.3 million barrels in the previous week.
At 1 pm ET, the Treasury Department is due to announce the results of its auction of $41 billion worth of five-year notes.
Stocks In Focus
Shares of Texas Instruments (TXN) are seeing significant pre-market weakness after the chipmaker reported weaker than expected third quarter revenues and provided disappointing guidance for the current quarter.
Amusement park operator Six Flags (SIX) may also come under pressure after reporting third quarter results that missed analyst estimates on both the top and bottom lines.
On the other hand, shares of Boston Scientific (BSX) are likely to see initial strength after the medical technology company reported better than expected third quarter results and raised its full-year guidance.
Investment management company Invesco (IVZ) may also move to the upside after reporting third quarter adjusted earnings that exceeded analyst estimates.
For comments and feedback contact: editorial@rttnews.com