Investing.com – US stock futures inch up after a solid set of economic figures contributed to a slide in equities in the previous session. More data on Wednesday could give further insight into the state of the US labor market, while comments from Federal Reserve Governor Christopher Waller will be monitored by investors on the lookout for clues about the central bank’s monetary policy plans. Meanwhile, Exxon Mobil (NYSE:XOM) warns that weaker oil refining profits will hit its fourth-quarter earnings and Samsung says it expects to post lower-than-anticipated quarterly income.
1. Futures higher
US stock futures edged higher on Wednesday, suggesting a potential rebound for equities on Wall Street following a drop in the prior session sparked by strong economic data.
By 03:27 ET (08:27 GMT), the S&P futures contract had inched up by 10 points or 0.2%, Nasdaq 100 futures had gained 44 points or 0.2%, and Dow futures had risen by 65 points or 0.2%.
The main averages all slipped on Tuesday, weighed down by a jump in benchmark 10-year Treasury yields to an eight-month peak after a raft of economic figures pointed to an unexpected increase in job openings and lingering inflationary pressures.
“[The] data suggests that the economy is maintaining its strong momentum,” analysts at ING said in a note to clients, adding that price gains continue to be “sticky” and concerns over the impact of President-elect Donald Trump’s sweeping import tariff plans are “starting to impact corporate thinking and behavior.”
The readings, which came ahead of the all-important monthly US employment report later this week, bolstered bets that the Federal Reserve will cautiously approach any possible interest rate reductions in 2025.
Markets are now anticiating the Fed will slash borrowing costs by 37.5 points by the end of the year, with the first drawdown not expected until July.
2. More data ahead
Further economic figures are due out on Wednesday, including labor market data that could provide further clarity on potential Fed monetary policy.
Economists expect a monthly report from management services group ADP to show that private payrolls dipped slightly in December, while the amount of Americans filing for first-time jobless benefits last week is tipped to rise marginally.
A separate release on Tuesday indicated that job openings in the US surprisingly moved up in November and hiring softened, in a sign the broader labor market is cooling at a slow enough pace that the Fed may not need to rush to slash interest rates.
Investors will likely be keeping tabs on a speech from Fed Governor Christopher Waller on Wednesday, as well as minutes from the rate-setting Federal Open Market Committee’s latest meeting, for any more indications on the central bank’s policy trajectory.
3. Exxon Mobil says weaker performance will dent quarterly earnings
Exxon Mobil has warned that a decline in oil refining profits, along with weak returns from across its operations, would dent its fourth-quarter income by around $1.75 billion versus the prior three-month period.
In a regulatory filing, the oil giant noted that oil refining margins would hit earnings by between $300 million to $700 million compared to the third quarter. Alterations in timing effects are also projected to cut away an additional $500 million to $900 million in earnings from its energy products division.
Although Exxon said upstream asset sales would aid results by roughly $400 million, overall impairment charges would lead to expenses of about $600 million.
The company is now expected to deliver a profit of $1.76 a share in the fourth quarter, slipping from $2.48 per share a year ago, according LSEG data cited by Reuters. These earnings would be well below analysts’ consensus estimates, Reuters reported.
Elsewhere, London-based energy major Shell (LON:SHEL) flagged that it will book a charge of $1.3 billion in the fourth quarter related to permits in Germany and the US. It added in an update that earnings from its integrated gas division will also be “significantly lower” than the third quarter.
4. Samsung warns of slowdown in profit growth
Samsung Electronics (KS:005930) warned it expects to report a weaker-than-expected operating profit for the fourth quarter, as the South Korean tech group largely lagged its rivals in supplying memory chips to the artificial intelligence industry.
Samsung’s operating profit for the October-to-December period was likely 6.50 trillion won ($4.5 billion), less than Bloomberg estimates of 8.96 trillion won, the company said in a preliminary earnings statement. Profit still rose from a lower base of 2.8 trillion won posted in the corresponding quarter of 2023.
Samsung, the world’s biggest memory chip maker by capacity, is grappling with a string of delays in developing high-bandwith memory chips for the AI industry.
The firm has offered scant details on its plans to supply semiconductor behemoth Nvidia (NASDAQ:NVDA) with HBM chips, trailing rivals such as SK Hynix and Micron Technology (NASDAQ:MU) in capitalizing on the AI boom.
Recent reports suggested that Samsung was struggling to meet Nvidia’s production standards for these chips, which are a key component of the latter’s advanced AI processors.
5. Crude advances
Oil prices rose Wednesday, extending a bounce from the prior session as US industry data pointed to a drop in oil inventories, while production by OPEC countries was seen falling.
By 03:28 ET, the US crude futures (WTI) climbed 0.8% to $74.87 a barrel, while the Brent contract rose 0.7% to $77.56 per barrel. Both contracts were close to their highest levels since mid-October.
Data from the American Petroleum Institute, released on Tuesday, showed that oil inventories in the US — the world’s top crude consumer — shrank by more than 4 million barrels in the week to January 3, substantially more than expectations for a draw of 250,000 barrels.
If confirmed by upcoming official data, it would be the second straight week of draws for inventories, reflecting increased travel during the year-end holiday season.
Additionally, data from Reuters showed oil production by countries in the Organization of the Petroleum Exporting Countries decreased in December, with maintenance activity in the United Arab Emirates offsetting an output hike in Nigeria.
(Reuters contributed reporting.)
