Higher open likely for the U.S. markets Wednesday after the key stock index futures jumped sharply on Wednesday morning.

At 7:10 a.m. ET, Dow Jones futures showed a positive open of 193 points.  Futures on the S&P and Nasdaq were also up.

The uptick in market mood is also attributed to reports that China’s services sector expanded at a faster rate in August, highest since May, despite so many headwinds.

The decision of Hong Kong administration to withdraw the controversial Extradition Bill also lifted the market sentiments.  

The Caixin/Markit Services Purchasing Managers’ Index (PMI) for China in August was 52.1. The PMI above 50 stands for positive growth.

Wall Street had a jolt on Tuesday when the Institute for Supply Management’s survey said the U.S. manufacturing activity contracted in August for the first time since early 2016 and triggered fears of a potential recession.

The weak U.S data indeed brightened a Fed interest rate cut in September, commented Jigar Trivedi, a commodities analyst at India’s Anand Rathi Shares in Mumbai.

Meanwhile, the Trump news on upcoming trade talks with China quoted President Donald Trump saying that that he would very “tough” on China in the “second term” if the trade talks dragged and do not lead to a deal.

At the data front, international trade figures for July will be published at 8:30 a.m. ET. The light vehicle sales data for August will also follow.

Navistar, American Eagle Outfitters, and Vera Bradley are some of the companies that will report earnings before the opening bell. Palo Alto Networks, Copart, and Slack will be reporting the latest quarterly results after the market close.

European stocks traded higher on Wednesday morning after British lawmakers defeated Prime Minister Boris Johnson’s government and sought to seize control of the parliamentary business, to block a no-deal Brexit.

 The pan-European Stoxx 600 surged 0.8 percent by late morning.

Oil price rises

Oil prices moved up on Wednesday and reversed losses of three days buoyed by positive news of service sector expansion in China.

Brent crude jumped 0.26 percent at $58.41 a barrel by 0850 GMT, while U.S. West Texas Intermediate futures gained 0.44 percent at $54.18 a barrel.

Meanwhile, Citi cut its Brent forecasts for the third and fourth quarters by $10 a barrel to $62 and $64 respectively and counts the benchmark may fall to $53 by the end of 2020.  GettyImages-Stock Market April 30 A trader works ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) on March 18, 2019 in New York City. Photo: JOHANNES EISELE/AFP/Getty Images

Asian markets up

Most Asian markets had good trading on Wednesday, according to stock market news. One trigger was China’s service growth data in August coming out robust.

Notable has been the surge in Hong Kong stocks by nearly 4 percent on Wednesday afternoon after reports came in that the controversial extradition bill might be withdrawn.

The Hang Seng index jumped 3.9 percent. Hong Kong leader Carrie Lam on Wednesday announced that the contentious extradition bill stands withdrawn.

Mainland Chinese stocks made gains on Wednesday. The Shanghai Composite jumped 0.93 percent.

Japan’s Nikkei 225 gained 0.12 percent while the Topix index was down 0.26 percent. The Kospi in South Korea was up 1.16 percent. The ASX 200 in Australia closed 0.31 percent lower. Overall, the MSCI Asia ex-Japan index was up more than 1.6 percent.

Indian shares closed higher Wednesday after market sentiments got a cheer from the easing of political tensions in Hong Kong and Europe. Benchmark BSE Sensex zoomed 0.44 percent and NSE Nifty50 was up 0.43 percent.

Gold prices eased on Wednesday but prices remained very much in the band of multi-year highs as fears over a global recession remained.

 Spot gold fell 0.6 percent to $1,537.20 per ounce at 0728 GMT.  The U.S. gold futures also crashed 0.6 percent at $1,546.6 an ounce.