U.S. equity futures rose as investors felt more confident that the Federal Reserve and other central banks would maintain economic support despite a surge in near-term inflation.
S&P 500-linked futures added 0.3%, indicating that the broad market index could post gains after Tuesday’s decline. Futures on the Nasdaq-100 rose 0.4%, suggesting a rise in tech stocks after the New York opening bell.
Investors feared that a rise in inflation could push Fed officials to roll back the monetary policy that pulled markets off the sale of Covid-19 last year. While officials in recent days have indicated they may start discussing reduction measures, they have stressed that there are no imminent plans to change policy.
“All of these signals from the Federal Reserve are that there is no rush to turn off liquidity,” said Savvas Savouri, chief economist at Toscafund Asset Management.
Growing comfort with the inflation outlook calmed markets, with the Cboe Volatility Index – the so-called Wall Street fear gauge, also known as the VIX – falling to its lowest level on Wednesday at 18.41 since early May.
Ahead of the opening bell, shares of Urban Outfitters rose more than 9% after the company reported earnings for its final quarter as the business landscape continued to normalize. Nordstrom shares were down 5% pre-market after its earnings disappointed investors.
Shares of Dick’s Sporting Goods were up more than 6% pre-market after the company boosted sales growth and earnings guidance for its current fiscal year. Shares of Build-A-Bear Workshop climbed 7.7% after reporting that sales jumped in the first quarter.
The results are due by Nvidia,
Snowflake, Workday, Williams-Sonoma and American Eagle Outfitters after markets close.
Investors are also witnessing a shareholder vote of Exxon Mobil that could influence the company’s carbon strategy in the years to come.
Bitcoin rose 5.6% to $ 39,778.74 from where it traded on Tuesday afternoon. Cryptocurrency trading was volatile in May, in part due to fears that China might step up regulatory efforts against it.
In bond markets, the yield on the 10-year Treasury bill climbed to 1.564% from 1.563% on Tuesday, but remained below its trading level earlier in May when inflation fears intensified. Yields increase when prices fall.
Yields on European government bonds fell, with 10-year Dutch government bonds falling below zero to minus 0.05%. Dutch bonds entered positive yielding territory for the first time in almost two years earlier in May.
The pan-continental Stoxx Europe 600 index fell 0.2%. Travel and leisure values led markets higher, with cruise line Carnival PLC advancing 1.1%.
In Asia, the main benchmarks closed after a mixed performance. The Shanghai Composite Index rose 0.3% while South Korea’s Kospi fell 0.1%.
New Zealand’s central bank has signaled that it could raise a key interest rate in the second half of next year, potentially making it one of the first developed markets to reverse the era’s rate cuts. Covid. Kiwi government bonds sold off, with the yield on the benchmark 10-year bond hitting 1.901% from 1.789% on Tuesday.
Write to Caitlin Ostroff à [email protected]
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