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U.S. stock index futures rose overnight Wednesday as stocks appeared to benefit from February momentum.
Futures contracts linked to the Dow Jones gained 34 points, or 0.09%. The S&P 500 and Nasdaq 100 futures contracts rose 0.06% and 0.07% respectively.
The move comes after the Dow advanced 63 points during normal trading hours to close at a record high. In a volatile session that saw the average of 30 stocks swing between gains and losses, the Dow Jones also hit its ninth intraday high of the year.
The S&P 500 and Nasdaq Composite also hit record highs in Wednesday’s session, but the indices ultimately failed to hold onto those gains. The S&P closed 0.03% lower, while the Nasdaq slipped 0.25%.
Federal Reserve Chairman Jerome Powell said on Wednesday that the economy faces challenges in the labor market and therefore monetary policy must remain “patiently accommodative”. In an address to the Economic Club of New York, Powell said the employment situation was “far” from where it needs to be.
“Powell has stayed true to his guns today,” said Ryan Detrick, chief financial market strategist for the LPL. “While many worry about too much stimulus and higher inflation, they are more worried about a stubborn employment situation. The truth is that low rates are here to stay for the foreseeable future. and today’s speech has hardly changed that, “he added.
For the week, all three major averages are higher and on track to post their second consecutive positive week. Although they are still early in the month, the indices are also higher for February. The Russell 2000 Index continues to gain attention and the Small Cap Index has beaten the S&P for the week, month and year so far.
In Washington, stimulus talks are underway, with investors predicting that any further relief measures will further support stocks.
“The markets expect a large amount of stimulus to be injected into the economy,” noted Scott Wren, senior global market strategist for Wells Fargo Investment Institute. “We believe further stimulus is needed to help the economy and consumers bridge the gap between when vaccines are more widely administered and lockdowns lifted,” he added.
A revenue-heavy week will continue on Thursday. PepsiCo, Kraft Heinz and Kellogg are among the names expected to report before the market opens. Disney and Expedia will give their quarterly reports after the bell on Thursday.
Of the components of the S&P 500 that have reported earnings so far, more than 80% have beaten Wall Street expectations, according to a CNBC analysis.
“As we move through February, we have states reopening, the virus is declining and vaccinations are spreading quickly. Looking back, we’ve had declining jobs, increasing layoffs and declining confidence,” said Brad McMillan, investment manager for the Commonwealth Financial Network.
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