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U.S. equity futures rose after Republicans proposed an extension of the short-term debt limit, which helped allay immediate concerns about a possible government default.
Futures on the S&P 500 gained 0.5% on Thursday, indicating that the broad market index will rise after a hectic week of trading. Contracts for the technology-focused Nasdaq-100 rose 0.9% and futures contracts for the Dow Jones Industrial Average rose 0.3%.
Concerns over the Treasury’s ability to raise funds to pay its bills weighed on investors this week, alongside soaring energy prices and a general move higher in government bond yields. The Republican proposal would extend the debt ceiling until December, provided Democrats set a dollar amount at the debt level. Treasury Secretary Janet Yellen has warned her department will likely exhaust its cash conservation measures by October 18 if Congress does not act.
“Right now there are a lot of fears out there. It only takes a few positive developments and suddenly that picture changes. Last night we had some positive news on the debt ceiling, ”said Lewis Grant, equity portfolio manager at Federated Hermes.
In bond markets, the yield on the benchmark 10-year Treasury bill fell to 1.517% Thursday from 1.524% Wednesday. Yields and prices move in the opposite direction.
Futures on Brent crude, the benchmark in international energy markets, fell 1.6% to $ 79.76 per barrel. Gas futures for delivery in the Netherlands – the European benchmark – fell 20% to 87.33 euros, which equates to around $ 100.94, a megawatt hour in a volatile trade. This came after Russian President Vladimir Putin said on Wednesday that Moscow was ready to work on stabilizing the global energy market, causing a sudden reversal in natural gas prices, which had previously reached their highest level on record. .
Meanwhile, the pan-continental Stoxx Europe 600 index jumped 1.1%, with gains led by the basic resources and autos sectors.
Indices in Asia also closed higher. Hong Kong’s Hang Seng climbed 3.1%, driven by gains from tech companies. Chinese Estates (Holdings) shares rose 32% in Hong Kong on Thursday after its majority shareholders offered to privatize the company. The group is a major shareholder of struggling real estate giant China Evergrande Group.
South Korean Kospi rose 1.8%. The Nikkei 225 added 0.5%.
New figures on the number of Americans who first applied for unemployment benefits during the week ended Oct. 2 are expected at 8:30 a.m. Unemployment claims rose for three straight weeks in September, but economists polled by the Wall Street Journal expect a week claims to have fallen slightly.
Concerns over the Treasury’s ability to raise funds weighed on investors.
Photo:
Brendan Mcdermid / Reuters
Write to Caitlin Ostroff at [email protected]
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