Wall Street points to higher open on Wednesday

The main Wall Street indices are expected to add to Tuesday’s gains at the open. Both European and US stocks are recovering following Monday’s losses amid worries of stricter restrictions over the winter, while some economic data due today could help or hinder sentiment. The economic recovery was better than expected but short-lived, analysts point out, and the winter months ahead are forecast to be tough. The Fed may also find itself under more pressure to use its powers and the newly agreed framework soon, with Congressional testimony by Fed chair Jerome Powell later today potentially unveiling more details of how exactly the central bank plans to deploy its resources in the months ahead. “The only upside as far as markets are concerned is that more stimulus won't be far behind,” noted Craig Erlam, analyst at OANDA. “This was certainly the message on Tuesday from Fed Chair Jerome Powell and Treasury Secretary Steve Mnuchin, although the fiscal side of the equation is proving problematic and may not come until after the election. A lot of damage can occur in the interim.” Five things to watch for on Wednesday: Federal Reserve chair Jerome Powell will deliver testimony to the Financial Services Committee of the US House of Representatives this afternoon, with the focus likely to be on the central bank’s outlook for the coming months as the US economy continues to struggle with the effects of the pandemic There will also be some macroeconomic data in the form of flash PMI for the US manufacturing and services sectors for the month of September. The readings will provide some insight on the stage of the US economic recovery as the election nears, and may provide some insight ahead of jobs data next week Aside from Powell’s congressional testimony, the Vice chair of the Fed Randal Quarles is also scheduled to speak as well as the president’s of the Chicago, Boston and Atlanta Fed branches Share price reaction from Johnson & Johnson (NYSE:JNJ) following news that the drug maker’s coronavirus vaccine candidate has entered late-stage testing Other firms eyed for share reactions include Nike Inc (NYSE:NKE) following an earnings beat late on Tuesday, as well as Tesla Inc (NASDAQ:TSLA) after investors were left unenthused by its ‘Battery Day’ event