Futures gain as Fed calms inflation worries

U.S. stock index futures rose on Wednesday after remarks from Federal Reserve officials helped calm inflation worries, while a recent dip in bond yields supported Nasdaq futures climb for a third straight session.

Fed vice chair Richard Clarida downplayed the effects of higher price pressures on Tuesday, voicing faith in the central bank’s ability to engineer a “soft landing” if prices continue to escalate beyond what is expected. read more

Fears of rising inflation have weighed on Wall Street’s main indexes this month, with most analysts expecting a jump in borrowing costs in the short term as the economy reopens.

The U.S. personal consumption report, the Fed’s favorite inflation gauge, is due on Thursday.

Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O) added between 0.1% and 0.3% in premarket trading, helped by subdued Treasury yields.

The yield on the benchmark 10-year Treasury note stood at 1.5672 after scaling a more than one-month high earlier in May. Higher yields pressure valuations for tech and other growth stocks, whose future cash flows are discounted at higher rates.

At 6:30 a.m. ET, Dow e-minis were up 77 points, or 0.2%, S&P 500 e-minis were up 11 points, or 0.3%, and Nasdaq 100 e-minis were up 34.5 points, or 0.24%.

Cryptocurrency-related stocks including those in Riot Blockchain (RIOT.O), Marathon Patent Group (MARA.O) and Coinbase Global (COIN.O) rose between 2% and 4.6% in premarket trading as bitcoin climbed back above $40,000 for the first time this week.

Oil heavyweight Exxon Mobil Corp (XOM.N) gained 0.7% ahead of its first major boardroom contest where climate change is a central issue. read more

Department store operator Nordstrom Inc (JWN.N) dropped 6% in thin trading after reporting a bigger-than-expected quarterly loss, hurt by price markdowns. read more

Apparel retailer Urban Outfitters (URBN.O) jumped 9.3% after it posted better-than-expected quarterly results and signaled accelerating sales in May.

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/business/futures-gain-fed-calms-inflation-worries-2021-05-26/

World Economic Magazine

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