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Dow futures rise 40 pts; Fed minutes, jobless claims, Michigan sentiment in focus

By Peter Nurse -- U.S. stocks are seen opening with small gains Wednesday, with investors wary ahead of the release of the minutes of a Federal Reserve meeting as well as significant economic data.

At 07:00 ET (12:00 GMT), the Dow Futures contract was up 40 points, or 0.1%, S&P 500 Futures traded 5 points, or 0.1% higher, and Nasdaq 100 Futures climbed 20 points, or 0.2%.

The main stock indices closed higher Tuesday, supported by a number of Federal Reserve officials making the case for a smaller interest rate hike in December.

The blue-chip Dow Jones Industrial Average closed almost 400 points, or 1.2%, higher, the broad-based S&P 500 ended up 1.4%, and the tech-heavy Nasdaq Composite climbed 1.4%.

Fed policymakers have been keen to express the need for interest rates to continue going higher to fight inflation, but there is a degree of confidence in the market that the December meeting will see a smaller increase than the 75-basis-point hikes of the last four meetings.

With this in mind, the minutes of the central bank’s last meeting, due later on Wednesday, will be studied carefully for clues on its plans for future rate hikes.

There is a packed economic calendar Wednesday, with investors set to digest weekly jobless claims numbers, durable goods, and new home sales for October as well as Michigan sentiment and November PMI data.

Quarterly earnings slow down Wednesday ahead of the holiday, with numbers from Deere & Company (NYSE:DE), the agricultural and construction equipment maker, the main release.

Elsewhere, Nordstrom (NYSE:JWN) stock slumped over 8% premarket after the upmarket clothing retailer reported a fall in net sales of 3.4% in its third quarter, while trimming its net profit forecast for the fiscal year ending January 2023.

HP (NYSE:HPQ) will also be in the spotlight after the PC maker announced plans to cut up to 6,000 jobs by the end of fiscal 2025, or about 12% of its global workforce, while also forecasting a lower-than-expected profit for the first quarter.

Crude oil prices fell sharply Wednesday following a Bloomberg report that the European Union, in coordination with the G-7, is discussing capping the price of Russian crude oil at between $65 and $70 a barrel, a significant discount to the current market rate.

EU officials are meeting on Wednesday with the aim of approving the cap mechanism and a proposed price level.

The market had suffered sharp falls at the end of last week and into this week on concerns about lower fuel demand from China, as the world's largest crude importer struggles with a record-high increase in daily COVID-19 infections.

Also of interest will be the official U.S. crude stockpiles from the Energy Information Agency later in the session, after Tuesday’s data from the American Petroleum Institute, an industry body, showed that U.S. stocks fell 4.8 million barrels in the past week.

By 07:00 ET, U.S. crude futures traded 2% lower at $79.31 a barrel, while the Brent contract fell 2.3% to $86.30.

Additionally, gold futures traded largely flat at $1,739.95/oz, while EUR/USD traded 0.2% higher at 1.0319.

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