The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to add to the modest gains posted during yesterday’s choppy trading session.

The markets may benefit from recent upward momentum, which helped lift the Dow and S&P 500 to record highs last week despite waning optimism about the Federal Reserve cutting interest rates in March.

While CME Group’s FedWatch Tool suggests the chances of March rate cut are just 20.5 percent, the Fed is still expected to begin lowering rates sometime in the coming months.

Recent upbeat economic data has seemingly reduced the likelihood of a near-term rate cut but a strong economy is still seen as a net positive for stocks.

A positive reaction to some of the latest earnings news may also generate buying interest, with shares of Enphase Energy (NASDAQ:ENPH) soaring in pre-market trading after the solar inverter maker reported weaker than expected fourth quarter revenues but said it expects demand to improve throughout 2024.

Auto giant Ford (NYSE:F) is also likely to see initial strength after reporting better than expected fourth quarter results, providing upbeat guidance for 2024 and announcing a supplemental dividend of 18 cents per share.

On the other hand, shares of Snap (NYSE:SNAP) are plummeting in pre-market trading after the Snapchat parent reported mixed fourth quarter results and forecast first quarter sales below analyst estimates.

Following the significant volatility seen over the past few sessions, stocks showed a lack of direction throughout the trading day on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing modestly higher.

The Dow climbed 141.24 points or 0.4 percent to 38,521.36, the S&P 500 rose 11.42 points or 0.2 percent to 4,954.23 and the Nasdaq inched up 11.32 points or 0.1 percent to 15,609.00.

The choppy trading on Wall Street came as some traders seemed reluctant to make significant moves amid uncertainty about the near-term outlook for the markets the following recent volatility.

Stocks fell sharply following the Federal Reserve’s monetary policy announcement last Wednesday but rebounded to record highs over the following two sessions only to pullback sharply once again in early trading on Monday.

While the major averages climbed well off Monday’s early lows, fading optimism the Fed will lower interest rates in March continued to hang over the markets.

A lack of major U.S. economic data also kept some traders on the sidelines following several key events last week.

Among individual stocks, shares of Palantir Technologies (NYSE:PLTR) skyrocketed by 30.8 percent after the data analytics provider reported better than expected fourth quarter revenues amid strong demand for its artificial intelligence offerings.

Audio streaming service provider Spotify (NYSE:SPOT) also jumped by 3.9 percent after reporting stronger than expected fourth quarter subscriber growth and providing upbeat guidance.

On the other hand, shares of Rambus (NASDAQ:RMBS) plunged by 19.2 percent after the chipmaker reported a year-over-year decline in fourth quarter revenue.

While most of the major sectors showed only modest moves on the day, airline stocks showed a substantial move back to the upside.

Reflecting the strength in the sector, the NYSE Arca Airline Index soared by 5.3 percent after plunging by 2.9 percent on Monday.

Considerable strength was also visible among oil service stocks, as reflected by the 2.0 percent jump by the Philadelphia Oil Service Index. The strength in the sector came amid an increase by the price of crude oil.

Biotechnology, commercial real estate and healthcare stocks also moved notably higher, while semiconductor stocks showed a significant move to the downside.

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