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U.S. equity futures rose on Wednesday night as traders kept tabs on interest rates and the lingering unrest in Washington.
Dow Jones Industrial Average futures traded 46 points higher, or 0.1%. S&P 500 futures were up 0.2% and Nasdaq 100 futures were up 0.1%.
Earlier today, the S&P 500 and Nasdaq Composite gained 0.2% and 0.4% respectively. The Dow, meanwhile, closed its doors flat.
Wednesday’s gains for the S&P 500 and Nasdaq came after Intel rallied nearly 7% to lead tech stocks higher. They also tracked the easing of US interest rates from their highest levels since March 2020.
The yield on the 10-year Reference Notes slipped to 1.09% per day after peaking at 1.18%. The rate cut came as two key Federal Reserve officials noted that monetary policy will remain easy for the foreseeable future.
The Fed vice chairman said the central bank would not raise rates until inflation hit 2%. Meanwhile, St. Louis Fed Chairman James Bullard noted that there will be a time when policy will need to be tightened, “but boy, I wouldn’t want to put a specific date on things to be. this stage. “
Rates have risen this year against the backdrop of prospects for increased fiscal stimulus in the United States after Democrats secured majorities in both the House and Senate. Inflation expectations have also picked up recently.
“We believe inflation in the United States will be higher than most people think over the next two years,” wrote Adam Hoyes, assistant economist at Capital Economics. “At the same time, we think investors are overestimating how quickly the Fed will allow monetary conditions to tighten. The Fed’s new flexible average inflation targeting framework suggests that it will allow inflation to exceed 2% for a period over the next several years. “
Investors are also watching Washington as House members voted to impeach President Donald Trump for the second time – making him the first US president to be impeached twice – as a bipartisan majority accused him of having prompted a riot on the US Capitol last week.
To be sure, the market largely ignored the political and civil unrest.
“Normally we would expect risk assets to fall back during an event like this, but the market seems more focused on the next administration at this point,” said Brian Price, head of investment management. at the Commonwealth Financial Network. “
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