U.S. stocks on Wednesday were poised to add to the prior session’s powerful rebound as a number of global central banks adopted easy-money policies in the face of an intensifying trade conflict between Beijing and Washington.
How did benchmarks perform?
Futures for the Dow Jones Industrial Average YMU19, +0.36% rose 105 points, or 0.4%, at 26,030, those for the S&P 500 index ESU19, +0.36% added 12 points, or 0.4%, to 2,887.75, while Nasdaq-100 futures NQU19, +0.60% advanced 50.25 points to reach 7,566, a gain of 0.7%.
On Tuesday, the Dow DJIA, +1.21% rose 311.78 points, or 1.2%, to end at 26,029.52, while the S&P 500 index SPX, +1.30% climbed 37.03 points, or 1.3%, to close at 2.881.77, powered by a rally by the information technology XLK, +1.66% and communication services XLC, +1.45% sectors, while the Nasdaq Composite Index COMP, +1.39% surged 107.23 points, or 1.4%, to finish at 7,833.27.
What’s driving the market?
For a second day in a row, the People’s Bank of China set the official midpoint reference for yuan at 6.9996 in Asian hours, but the level approaches a key level of 7, widely viewed as a line in the sand for the currency. The PBOC fixes the currency daily and allows it to move up to 2 percentage points on either side of its midpoint.
A breach of that level on Monday, interpreted by some as an intentional weakening of its currency, helped to ignite a global stock market selloff and slump in bond yields, but markets have thus far stabilized, despite the prospect of an uncertain timeline for a Sino-American trade resolution.
Adding to market jitters is growing fears of a recession in the U.S. against a weaken economic backdrop throughout the globe.
Central bank’s in India and New Zealand lowered their domestic interest rates to levels that are weaker than had been expected, highlighting anxieties centered on the health of the world-wide economy.
India’s central bank cut its key interest rate for the fourth consecutive time, reducing the repo rate by 0.35% to 5.40% to shore up the economy, while New Zealand’s central bank cut its benchmark interest rate to an all-time low of 1% on Wednesday.
Read: Why a falling Chinese yuan crushed the stock market and intensified the trade war
Also see: Why the ‘tail risk of a currency war can’t be ruled out’ as U.S.-China tensions mount
Which stocks are in focus?
Lumber Liquidators Holdings Inc. LL, -2.14% reduced its full-year comparable stores outlook to “approximately flat.” Lumber Liquidators shares were trading 2.3% lower in premarket action.
The Walt Disney Co. DIS, +2.58% on Tuesday said beginning Nov. 12, when the entertainment giant’s ambitious streaming service makes its debut, U.S. consumers will be able to subscribe to a streaming bundle of Disney+, ESPN+ and advertising-supported Hulu for $12.99 a month. Disney shares were down 3.1% before the opening bell.
What other assets are in focus?
The U.S. 10-year Treasury note yield TMUBMUSD10Y, -2.96% were trading at 1.67% after finishing at 1.740% on Tuesday, according to Dow Jones Market Data.
Read: September rate cut ‘fully priced’, with Trump tariff tweets seen pushing Fed to take more action
Gold for December delivery GCZ19, +1.16% aimed for a fourth straight gain, breaching a psychological level above $1,500 per ounce.
Oil futures prices drifted slightly lower. U.S. oil futures CLU19, -0.21% fell 0.2% at $53.52 a barrel, after gaining 1.9% on the New York Mercantile Exchange on Tuesday.
In Asia, Japan’s Nikkei 225 Index NIK, -0.33% fell 0.3%, Hong Kong’s Hang Seng Index HSI, +0.08% HSI, +0.08% ended virtually unchanged, adding less than 0.1%, while the CS1 300 index 000300, -0.41% dropped 0.4%.
The pan-European Stoxx 600 SXXP, +1.03%, meanwhile, headed 1% higher Wednesday.
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