by Diana Mandia

(Reuters) – Wall Street is expected to remain directionless on Wednesday and European stocks are cautiously higher in mid-session trading as investors await Federal Reserve Chairman Jerome Powell’s speech to the House of Representatives later in the day.

New York index futures point to a 0.02% drop in Wall Street trading for the Dow Jones, while the Standard & Poor’s 500 is expected to open up 0.15% and the Nasdaq up 0.29%.

In Paris, the CAC 40 gained 0.78% to 7,566.93 points at around 11:11 GMT after falling the previous day amid persistent fears regarding the political situation in France.

In Frankfurt, the Dax rose by 0.67% and in London, the FTSE 100 gained 0.62%.

The EuroStoxx 50 index is up 0.71%, the FTSEurofirst 300 is up 0.55% and the Stoxx 600 is up 0.57%.

Markets are digesting the latest comments from the Federal Reserve chairman, who told U.S. senators on Tuesday that the nation’s economy was no longer overheating, suggesting the case for lowering interest rates was becoming more compelling. However, he did not give a specific timeline for such a move.

Jerome Powell is expected to speak again on Wednesday, this time before the House Financial Services Committee.

The release of June CPI inflation figures on Thursday and the start of the earnings season also provide cause for caution, as does the political situation in France, which is struggling to find a majority to form a new government after early parliamentary elections, a situation that raises doubts about the country’s ability to close its budget deficit.

The easing of bond yields also helps the stock market.

As for corporate earnings and sales forecasts for the second quarter, Deutsche Bank analysts expect them to have increased slightly, marking the first positive year-over-year growth rate since the first quarter of 2023. STOCKS TO FOLLOW ON WALL STREET

The New York Stock Exchange is expected to remain directionless after the S&P 500 and Nasdaq set new closing records, the fifth and sixth in a row, respectively.

Nvidia continued its gains, rising 1% in pre-market trading, and shares of TSMC, the world’s largest chipmaker, rose 1.9% after the group reported 32% growth in second-quarter sales.

VALUES IN EUROPE

In terms of values, Alstom rose by 3.45% after announcing on Wednesday the signing of a major contract for the delivery of new metro trains for the city of Hamburg.

Container company Hapag-Lloyd jumped 6.6% after raising its 2024 earnings outlook on Tuesday, driven by higher demand and short-term freight rates.

Volkswagen, which announced on Wednesday that it was considering closing the Brussels site of its luxury brand Audi in a context of falling demand for electric vehicles (EVs) and lowered its annual margin target, fell 0.18%.

RATE

Eurozone bond yields fell on Wednesday, particularly in France, where they rose sharply the day before. The political risk premium appears to be easing after the sharp increases recorded since early June in the wake of early parliamentary elections in France.

The yield on the ten-year German Bund fell by 6.2 basis points to 2.5200% and the two-year yield lost 3 basis points to 2.8980%.

In France, the yield on the ten-year OAT fell by 9.4 basis points to 3.1640% on Tuesday and in Italy, its equivalent posted a drop of 10.2 basis points to 3.1640%.

In the United States, the yield on ten-year Treasuries fell by 2.8 basis points to 4.2724%.

CHANGES

Foreign exchange markets were fairly stable on Wednesday. The dollar, which was little changed despite the Fed chairman’s accommodative statements, lost 0.04% against a basket of benchmark currencies, while the euro gained 0.06% to $1.0818.

OIL

Crude prices are steady in a volatile session as markets position for higher rates through September.

Brent fell by 0.09% to $84.58 per barrel and US light crude (West Texas Intermediate, WTI) was stable at $81.41.

(Written by Diana Mandiá, edited by Kate Entringer)

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