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Market Snapshot: Stock futures rise after blowout tech earnings, Fed meeting

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Stock-index futures rose Thursday after a round of upbeat earnings from tech heavyweights and as investors weighed dovish remarks by Federal Reserve Chairman Jerome Powell and President Joe Biden’s rollout of a $1.8 billion package of additional government spending.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average
    YM00,
    +0.39%

    rose 133 points, or 0.4%, to 33,857.
  • S&P 500 futures
    ES00,
    +0.67%

    were up 28.20 points, or 0.7%, at 4,204.50.
  • Nasdaq-100 futures
    NQ00,
    +1.03%

    jumped 144.25 points, or 1%, to 14,036.50.

On Wednesday, stocks ended with small losses following the Fed meeting, after the S&P 500
SPX,
-0.08%

notched an intraday record. The Dow
DJIA,
-0.48%

fell 164. 55 points, or 0.5%, while the S&P 500 ended 0.1% lower and the Nasdaq Composite
COMP,
-0.28%

lost 0.3%.

What’s driving the market?

Corporate earnings remain strong, with Apple Inc.
AAPL,
-0.60%

and Facebook Inc.
FB,
+1.16%

delivering much stronger-than-expected results late Wednesday.

Some analysts said the results could offer a test for a market that’s struggled to breakout of a sideways trading range.

“This week’s steady but notable rise in Treasury yields could be weighing on U.S. equities and if Apple’s earnings beat is unable to set Wall Street alight, it doesn’t bode well for the rest of the earnings season,” said Raffi Boyadjian, senior investment analyst at XM, in a note.

Treasury yields pulled back Wednesday afternoon after the Federal Reserve and Powell struck a dovish tone, but have pushed back to the upside Thursday morning. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose 2.7 basis points to 1.65%.

Rising yields can be a headwind, particularly for growth oriented stocks. A backup in yields in March was credited with adding fuel to a rotation away from tech stocks and other highfliers into more cyclical stocks poised to benefit from the reopening of the economy.

Stocks edged higher during Powell’s news conference, with the S&P 500 hitting an all-time high, but ended the day slightly lower.

Read: Fed’s Powell ‘doesn’t blink,’ and 5 other things we learned from his press conference

“With no meaningful change to monetary policy or communication, this meeting was simply a message to market participants to sit back and observe as the economic recovery continues to unfold,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

“For now, the Fed is maintaining a tight grip on the bond market, but it appears like a discussion on tapering bond purchases is right around the corner,” he said, in emailed comments.

Biden, in an address to a joint session of Congress, called for bigger government investment in the economy, including a $1.8 trillion proposal for additional spending on child care, education and paid leave partly offset by higher taxes on wealthy Americans.

Capitol Report: The word ‘jobs’ appeared more than 40 times in Biden’s first speech to Congress

Data on first-time claims for unemployment benefits are due at 8:30 a.m. Eastern. Economists expect initial claims to have fallen to 528,000 in the week ended April 24, down from 547,000 the previous week.

An estimate of first-quarter gross domestic product is also due at 8:30 a.m. Economists expect it to show the economy grew at an annualized rate of 6.5% versus 4.3% in the fourth quarter of 2020.

A March pending home sales index is scheduled for release at 10 a.m.

Which companies are in focus?

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