US stock index futures rose Wednesday morning after an inflation report showed modest rises, in line with economists’ expectations, and bond yields fell slightly.
What do major indices do?
Futures on the Dow Jones Industrial Average
YM00, + 0.46%
rose 142 points, or 0.5%, to 31,953.S&P 500 futures
ES00, + 0.32%
rose 13 points, or 0.3%, to 3,886.Nasdaq 100 futures
NQ00, + 0.52%
jumped 84 points, or 0.7%, to 12,872.50.
The tech-heavy Nasdaq Composite
COMP, + 3.69%
According to Dow Jones Market Data, the value rose 464.66 points, or 3.7%, on Tuesday, the largest daily percentage gain since November 4th. The rebound came a day after the index fell into correction territory, down 10% from its recent high. The Dow
DJIA, + 0.10%
rose 30.30 points, or 0.1%, during the S&P 500
SPX, + 1.42%
recorded an increase of 1.4%.
What is driving the market?
The US consumer price index in February showed that inflation rose slightly, as expected. Inflation rose 0.4% for the month, but excluding food and energy, the increase was 0.1%. Headline CPI increased from 1.4% to 1.7% per year, while the core gain decreased from 1.4% to 1.3% after 12 months.
US Treasury bond yields fell slightly on Wednesday, interrupting the momentum that has driven a rotation from soaring technology stocks and other growth stocks into more cyclically sensitive, value stocks.
The yield on the 10 year Treasury bill
TMUBMUSD10Y, 1.551%
was Decline by around 5 basis points to 1.547% before an Auction of 10-year benchmark notes valued at $ 38 billion. Yields, along with inflation expectations, have risen for five straight weeks.
“The recent rally in bond yields has hurt technology stocks the most because of their high valuations,” Charalambos Pissouros, senior market analyst at JFD, said in a note.
“High-growth technology companies are valued based on expected earnings in the years ahead. When yields rise, their discounted present value falls. The opposite is true when yields pull back. That’s why Nasdaq was the grand winner yesterday, ”said Pissouros.
Yields are rising as investors expect US economic growth to spike and inflation to accelerate, at least in the short term. The OECD said This week, President Biden’s coronavirus bailout will boost global economic growth by about one percentage point in 2021, and the U.S. growth rate has been revised from 3.2% to 6.5%.
The house is expected to have the passage of a $ 1.9 trillion COVID-19 relief bill Already on Wednesday, which is added to the previous rounds of aid spending.
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See also: The economy is ready to snap for stimuli and faster coronavirus vaccinations
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The data on the federal budget are to be published at 2 p.m. A deficit of $ 255 billion is expected.
Which companies are in focus?
- General Electric Co.
GE, -1.20%
Stocks fell 2% in premarket trading after agreeing Combine the aircraft leasing business with Irish AerCap Holdings NV as part of a deal worth more than $ 30 billion. Separately, GE said its board of directors would recommend shareholders approve an 8-for-one stock split because the industrial conglomerate has “changed significantly” in recent years. Video game dealer stocks GameStop Corp.
GME, + 26.94%
were at More than 12% in premarket trading after a rally on Tuesday launched the retailer’s meme stock favorite on Reddit’s WallStreetBets forum highest goal since the end of January.- Roblox Corp. received a reference price from $ 45 per share from the New York Stock Exchange late Tuesday as the tween-centric gaming platform prepares to go public via a direct listing on Wednesday. It is traded under the ticker RBLX.
Shares of MongoDB Inc.
MDB, + 8.66%
before the bell rose 2.6% after the database firm returned results late Tuesday that exceeded Wall Street estimates The outlook was much more subdued.- Qualtrics International Inc.
XM + 7.34%
Shares fell 3% after the experience management software company reported results for the fourth quarter of the fiscal year exceeded the forecasts of the analysts.
What are other markets doing?
The ICE US dollar index
DXY, + 0.02%
A measure of the currency versus a basket of six major competitors rose 0.1% after the hit a high of more than three months On Monday.Oil futures higher before an inventory reportwith the US benchmark
CL.1, + 1.02%
by 44 cents, or 0.4%, to $ 64.45Gold futures
GC00, -0.05%
fell $ 6.90, or 0.3%, to trade near $ 1,710.00 an ounce.The Europe-wide Stoxx 600
SXXP, + 0.37%
up 0.2% and London’s FTSE 100
UKX, -0.12%
lost 0.2%.In Asia the Shanghai Composite SHCOMP slipped 0.1% while Hong Kong’s Hang Seng Index HSI rose 0.5% and the Japanese Nikkei 225 I was practically unchanged at 29,036.56.
