U.S. stock futures were up modestly Thursday morning, as investors weighed the Federal Reserve’s path on interest rates and monitored the situation in Eastern Europe as Russia’s invasion of Ukraine entered its second week.
What’s happening
- Futures on the Dow Jones Industrial Average YM00, +0.34% rose 117 points, or 0.3%, to 33,965.
- S&P 500 futures ES00, +0.32% were up 0.3% at 4,396.
- Nasdaq-100 futures NQ00, +0.18% rose 0.2% to 14,267.
On Wednesday, the Dow Jones Industrial Average DJIA, +1.79% surged nearly 600 points, or 1.8%, while the S&P 500 SPX, +1.86% jumped 1.9% and the Nasdaq Composite COMP, +1.62% rose 1.6%.
What’s driving markets
Federal Reserve Chairman Jerome Powell will deliver a second day of congressional testimony on Thursday, appearing before the Senate Banking Committee after saying on Wednesday he would recommend a quarter-point rate increase in two weeks time. Powell left the door open to more substantial increases in future months if inflation doesn’t subside.
“If the Fed hikes 25bp in March that will have no impact on inflation in the coming several months. So, the question is not whether the Fed rate hikes are controlling inflation, but whether the predetermined course of inflation will brake lower sooner enough to stop the Fed/Powell from taking a more aggressive step or steps later,” said Robert Brusca, chief economist at FAO Economics.
Michael Brown, senior market analyst at Caxton FX, called Wednesday’s market rebound a “bear-market squeeze,” and said the S&P 500 will struggle to clear its 200-day moving average until the Ukraine crisis de-escalates.
Russian Foreign Minister Sergei Lavrov said his country was ready for peace talks but will continue to attack what he called Ukraine’s military infrastructure. The United Nations reported that the refugee count has now topped 1 million.
Oil futures CL.1, +0.97% surged to the highest level since 2008, with demand falling for Russian-produced crude and the OPEC+ oil cartel opting on Wednesday to stick with its planned production increase.
MSCI and FTSE Russell both said they would remove Russian stocks from their indexes next week, as Moody’s and Fitch cut Russia’s sovereign credit rating to junk.
First-time applications for unemployment benefits fell by 18,000 to a two-month low of 215,000 in the last week of February, pointing to a pickup in hiring and declining layoffs as the economy rebounded from a omicron-induced lull. Economists polled by The Wall Street Journal had forecast initial jobless claims to total a seasonally adjusted 225,000 in the seven days ended Feb. 26.
Markit’s final reading of the services purchasing managers index for February is set for 9:45 a.m., while the Institute for Supply Management’s February services index is scheduled for 10 a.m. January factory orders data is also due at 10 a.m.
Which companies are in focus?
- Shares of Snowflake Inc. SNOW, +0.57% dropped 19% in premarket activity after the software company late Wednesday suggested product sales were likely to slow down this year.
- Okta Inc. OKTA, -0.78% shares were down after the enterprise software maker late Wednesday reported fiscal fourth-quarter results.
- Victoria’s Secret & Co. VSCO, +6.68% late Wednesday reported quarterly profit and sales that surpassed Wall Street estimates but projected a dimmer first quarter, saying it expects inflation to be a concern throughout the year for retailers. Shares were little changed.
What are other assets doing?
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.868% was down slightly at 1.859%.
- The ICE U.S. Dollar Index DXY, +0.25%, a measure of the currency against a basket of six major rivals, was up 0.3%.
- Gold futures GC00, +0.47% edged up 0.4% to $1,930 an ounce.
- Bitcoin BTCUSD, -0.32% was down 0.4% near $43,760.
- The Stoxx Europe 600 SXXP, -0.42% fell 0.4%, while London’s FTSE 100 UKX, -0.87% was down 0.9%.
- In Asia, the Shanghai Composite SHCOMP, -0.09% edged down 0.1%, while the Hang Seng Index HSI, +0.55% rose 0.6% in Hong Kong and Japan’s Nikkei 225 NIK, +0.70% gained 0.7%.
Add Comment