Stock Futures See Dow Jones Rebound Extend

Contracts for the Dow Jones Industrial Average rose 0.5% on Wednesday, suggesting the blue chip index will add to its opening rebound and close to its all-time high. Futures on the tech-focused Nasdaq-100 edged down 0.1%.

Investors are putting aside concerns about the economic effects of the Delta variant, although markets are expected to remain nervous heading into the peak summer vacation period. A record start to the season among America’s biggest companies is helping to bolster sentiment. Many fund managers also see few other places to deploy liquidity with yields on government and corporate bonds trading at depressed levels.

“The outlook in an absolute sense is still quite good: this is a rebound for a great recession,” said Jonas Goltermann, senior markets economist at Capital Economics. “It’s hard to justify big falls.

Yet Mr. Goltermann added that “last month [has] the navigation has not been smooth and it may take a while to get back to something calmer. He expects government bond yields to rebound to their March highs and investors to reallocate money to stocks that benefit from the reopening of the economy, albeit with less eagerness than ‘at the beginning of the year.

Before the bell in New York City, Chipotle Mexican Grill climbed more than 5% pre-market after reporting sales that exceeded pre-pandemic levels. United Airlines added 1.7% after saying it expected to earn pre-tax profit in the third quarter from a recovery in travel.

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Second-quarter revenue increased 27%, giving the medical company’s shares a 1.1% increase in pre-market trading. Harley-Davidson shares gained 3.5% after the motorcycle maker made a profit in the second quarter.

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Whirlpool and Equifax are expected to release their results after markets close. As of Tuesday, 85% of S&P 500 companies that have filed quarterly results have beaten analysts’ expectations, according to FactSet

The yield on 10-year Treasuries climbed to 1.248% from 1.208% on Tuesday. Yields are moving in the opposite direction to bond prices and have slipped in recent weeks, indicating less concern about a prolonged breakout in inflation.

“Consumers are going to remain at least moderately cautious as Delta spreads everywhere,” said Christopher Jeffery, head of inflation and rate strategy at Legal & General Investment Management. “It’s really hard to think that the UK model won’t at least partially be followed in the US and Europe,” he added, referring to a spike in cases in the UK.

Still, Jeffery is optimistic about the outlook for equities. “It is difficult for us to be structurally negative on stocks” given the good start to the results season, he said.

In overseas markets, the Stoxx Europe 600 jumped 1.3%, driven by shares of travel, leisure and retail companies.

Among individual stocks, the owner of British Airways, International Consolidated Airlines Group, airline EasyJet and cruise line Carnival all gained more than 3%. Next rose more than 8% after the British clothing retailer raised its profit forecast and declared a special dividend.

Japan’s Nikkei 225 rose 0.6% at the close of trading and the Shanghai Composite Index rose 0.7%.

Write to Joe Wallace at [email protected]