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U.S. equity futures rallied on Wednesday ahead of U.S. inflation data, suggesting major indices will resume this month’s rally.
S&P 500-linked futures rose 0.4%, while Dow Jones Industrial Average futures gained 0.3%. Technology-intensive Nasdaq-100 contracts rose 0.5%. The S&P 500 and Dow closed lower on Tuesday after hitting record highs earlier in the week.
Stocks rose this month, with the benchmark S&P 500 posting its eighth record late on Monday. Investors are betting President Biden’s $ 1.9 trillion stimulus package will help support the economy while vaccinations will help reduce the number of Covid-19-related deaths. Investor sentiment was also supported by quarterly corporate results which turned out to be largely better than expected.
“As long as earnings estimates rise, stocks rise,” said Andrew Slimmon, managing director and portfolio manager at Morgan Stanley Investment Management. “The magnitude of the gains that we’ve seen is so great because the benefits have been grossly underestimated.”
Outside of business hours, rideshare company Lyft was up 12% after posting a narrower annual loss, suggesting the company is heading towards profitability. Twitter rose 3.5% after the social media company said it added users during the holiday season. Cisco Systems fell 5.4% after saying revenue and profits for the fiscal second quarter declined.
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