Despite Russia's ongoing special operation in Ukraine and peace talks aimed at achieving at least a cease-fire, investors seemed focused on the upcoming economic data release.
Strong gains in stocks, especially tech stocks, occurred Tuesday afternoon despite a recession warning in the bond market, with 2-year Treasury yields briefly exceeding 10-year bond yields for the first time since 2019.
The U.S. Federal Reserve is trying to weigh how tightly it should target inflation, and this week's employment data will influence its decision at its May meeting.
Expectations are rising that the Fed will raise rates by half a point, rather than the usual quarter-point hike. Employment data released Tuesday showed 11.3 million job openings in February, about 5 million more than the number of available jobs.
Oil has been under pressure in recent days and fell again on Tuesday ahead of the release of the previous week's government report on oil inventories. The oil industry's own report will be released after the market closes.
Later this week, the government will release personal income and spending data, which may show how households have been affected by higher prices for food and other goods, as well as higher gasoline prices last month.
Here are 3 factors that could affect the market Wednesday:
1. ADP payroll data.
The U.S. nonfarm payroll change data for March from ADP, a measure of the monthly change in nonfarm and private sector employment, is due out Wednesday morning at 8:15 a.m. Eastern Time (1:15 p.m. Greenwich Mean Time). According to the consensus forecast, companies are expected to create 450,000 jobs, down from the previously reported 475,000. But this data will come out a couple of days before the broader government jobs report and is likely to be a barometer of market sentiment.
2. economic production
U.S. GDP for the fourth quarter will also be released at 08:30 a.m. ET (1:30 p.m. GMT). The figure is expected to be 7.1% from the previous month, well above the previous figure of 2.3%.
3. Crude Oil Stocks.
Crude oil inventories will be released at 10:30 Eastern Time (15:30 GMT). Analysts forecast a decline of 1.022 million barrels in crude oil stocks. The data will come amid a steady drop in oil prices, despite Russia's military special operation in Ukraine and sanctions that could affect oil supplies. Weekly distillate inventories are projected by the EIA to decline by 1.550 million and gasoline inventories by 1.744 million.
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