U.S. stock index futures were pointing to gains for the benchmark indexes on opening Wednesday, and an advance for the technology-sector, after banner results from Google parent Alphabet and microchip maker Advanced Micro Devices.
Wall Street also was parsing a report from Automatic Data Processing, which showed that U.S. economy shed 301,000 private sector jobs in January as it wrestled with the spread of the omicron variant of coronavirus.
What’s happening
- Futures on the Dow Jones Industrial Average YM00, +0.01% rose 53 points, or 0.2%, to 35,325.
- Futures on the S&P 500 ES00, +0.59% gained 0.8%, or 37 points, to 4,572.
- Futures on the Nasdaq-100 NQ00, +1.11% jumped 1.5%, or 224 points, to 15,218.
On Tuesday, the Dow Jones Industrial Average DJIA, +0.78% rose 273 points, or 0.78%, to 35405, the S&P 500 SPX, +0.69% increased 31 points, or 0.69%, to 4547, and the Nasdaq Composite COMP, +0.75% gained 106 points, or 0.75%, to 14346.
What’s driving markets
Markets were headed higher even as a report from ADP indicated a sharp, unexpected reduction in private sector payrolls for January.
The report shows that payrolls for the private sector fell by 301,000 in January, well below estimates for a gain of 200,000, according to an average of estimates from economists polled by The Wall Street Journal. The reading, which comes ahead of the closely watched U.S. Labor Department jobs report for January on Friday, marks the first negative jobs growth since December of 2020 and may highlight the impact of the omicron strain on employment. The ADP report, however, doesn’t always align with the Labor Department’s NFP report.
The jobs data comes as investors were digesting quarterly results from Alphabet Inc. GOOGL, +1.73%, which accounts for about 4% of the Nasdaq-100 and 2% of the S&P 500 by weight. That company’s stock surged 10% in premarket trade after announcing a 20-for-1 stock split and reporting stronger results than forecast in the fourth quarter. The results raise the bar for social-media giant Meta Platforms FB, +1.83%, formerly known as Facebook Inc., which reports results after Wednesday’s close.
Advanced Micro Devices AMD, +2.21% surged as well as the chip maker guided for an outlook above Wall Street estimates. PayPal Holdings PYPL, +2.24% was the major disappointment, as the payment services company said inflationary pressures and weaker consumer sentiment was weighing on its outlook.
Investor sentiment has been swinging between concern over Federal Reserve monetary policy tightening and confidence in the economic recovery, resulting in volatile trading to start the year. A healthy corporate earnings outlook is helping to ease the uncertainty though. Of the 200 S&P 500 companies that have reported results so far, 80% have met or beaten estimates.
Meanwhile, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, was expected to stick to a plan for an increase of 400,000 barrels of oil per day each month, but it is unclear what other measures the group by institute amid a surge in oil values and persistent concerns about COVID.
Investors also continued to monitor tensions between the U.S. and Russia over Ukraine. Western officials say Russia has massed more than 100,000 troops near the Ukraine border while diplomatic talks have yet to make a breakthrough.
