Investing.com - Wall Street is expected to open slightly higher Wednesday, judging by the U.S. equity futures, as investors take a more sanguine view of Iran's attack on U.S.-led forces in Iraq overnight.
The futures had indicated sharp market moves lower, but these losses have been bought into as fears have abated that the missile strikes would lead to an immediate escalation of military action in the region.
Futures for the S&P 500, down almost 2% at one point, were actually trading 0.23% higher by 0623 ET, while futures for the Nasdaq were 0.19% higher.
The futures for the Dow have underperformed, dropping 0.07%, weighed by losses in the futures contract of Boeing Co (NYSE:BA) after an aeroplane manufactured by the company and operated by Ukrainian International Airlines crashed in Iran. Both Ukrainian and Iranian officials indicated that they suspected a mechanical issue.
Hopes that these attacks would be the end of the direct military confrontation between the U.S. and Iran were boosted by a tweet from U.S. President Donald Trump that “all is well” and that he would be making a statement later in the day. The Iranian foreign minister also indicated that his country did not seek an escalation of the conflict and that their response had been ”proportionate”.
As investors digest the possible deescalation of the conflict, thoughts turn back to the country’s underlying economic circumstances. The recent non-manufacturing ISM index showed continued strength from the dominant services sector while the Federal Reserve is widely expected to remain on the sidelines at its meeting latest this month after easing interest rates three times last year.
With this in mind, investors will look forward to the release of the ADP non-farm employment release for December later today. This is often used as a gauge as to how Friday's key employment data looks. It is expected to show continued employment growth with 160,000 more jobs added, compared with 67,000 jobs added the previous month.