U.S. stock futures are rising early Wednesday as the market’s rebound looks set to gather pace following last week’s bad run.
Wall Street’s so-called fear gauge is also now easing. The CBOE Volatility Index, or VIX, has fallen 16% in the first days of the week. It coincided with the S&P 500’s best two-day gain since February.
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U.S. stock futures rose early Wednesday as the market’s rebound looked set to gather pace following last week’s bad run.
Futures on the Nasdaq 100 jumped 0.7% ahead of the open, while S&P 500 futures were 0.3% higher and Dow Jones Industrial Average futures edged 0.1% up. All three major stock indexes closed higher Tuesday for a second consecutive day, with the Nasdaq Composite the best performer rising 1.6%. It followed a six-day losing streak as Middle East tensions mounted and the path of interest-rate cuts became more uncertain.
But Wall Street’s so-called fear gauge is now easing. The CBOE Volatility Index, or VIX, has fallen 16% in the first days of the week. It coincided with the S&P 500’s best two-day gain since February.
“Several factors helped to drive this, but perhaps the most important was actually disappointing flash PMIs in the U.S., which added to hopes that rate cuts would still happen this year,” Deutsche Bank strategist Jim Reid said.
The manufacturing purchasing managers’ index fell to 49.9 in April, signaling a contraction, while the services PMI was also weaker than expected. Treasury yields fell as a result Tuesday, but edged higher early Wednesday. The yield on the 10-year Treasury note rose 2 basis points to 4.625%.
Markets now see a greater probability of a rate cut by September, a 68.5% chance up from 66.6% the previous day, according to CME’s FedWatch tool.
Corporate earnings are also supporting the market’s recovery–GM, GE Aerospace, and UPS all beat expectations Wednesday, while Tesla stock surged 13% in after-hours trading after the company said it is accelerating the launch of new models.
The EV maker’s jump should set the tone for the market early Wednesday but there are plenty more earnings for investors to keep an eye on throughout the day, including Boeing and AT&T before the open and Meta Platforms after the close.
By
Joseph Hoppe, Dow Jones Newswires
Gold futures fell 0.3% to $2,336.1 a troy ounce, trading in a narrow band as the market’s attention turns to upcoming U.S. economic data.
The precious metal had slumped as low as $2,304.6 in the previous session, its lowest price since April 5, but remains up 7.1% on-month.
Safe-haven demand has given way to economic concerns, as tensions between Israel and Iran ease and investors shift focus to Thursday’s U.S. GDP and Friday’s personal consumption expenditure index data releases.
The data could provide more clarity on the Federal Reserve’s plans for monetary easing, as expectations for interest rate cuts this year have been dialed back after a series of hotter-than-expected economic data points.
Historically, higher interest rates reduce the appeal of noninterest bearing gold. Elsewhere, copper rose 0.7% to $9,798.5 a ton.
