Market Snapshot: U.S. stock futures climb after Fed signals support may start to ease

U.S. stock futures pointed to gains for Wall Street on Thursday, after the Federal Reserve didn’t pull any surprise punches at its policy meeting, and shares of troubled property giant China Evergrande climbed in Hong Kong.

How are stock-index futures trading?
  • Dow Jones Industrial Average futures

    rose 186 points, or 0.5%, to 34,316

  • S&P 500 futures

    rose 26 points, or 0.6%, to 4,410

  • Nasdaq-100 futures

    gained 96 points, or 0.6%, to 15,257

On Wednesday, the Dow Jones Industrial Average

rose 338 points, or 1%, to 34258, the S&P 500

increased 41 points, or 0.95%, to 4396, and the Nasdaq Composite

gained 150 points, or 1.02%, to 14897. The Dow and S&P 500 each scored their best session in two months.

Read: ‘It’s really easy to navigate’ this stock market, says a BofA star strategist. Here’s what she says to do

What’s driving the market?

Stock futures were rising a day after the Fed pledged to keep its bond-buying program and ultralow interest-rate regime in place to support the economy and financial markets for now.

However, Fed Chair Jerome Powell said plans to taper the central bank’s bond- buying program could be announced in November, and officials also penciled in an interest-rate increase in 2022. Still, the Fed didn’t upset the market’s apple cart, said observers.

Read: Hawks rule the roost at Fed, economists say

“A repeat of the taper tantrum, which hurt both equities and fixed income in 2013, is unlikely because the Fed has been so clear about how slowly it is removing support,” said Scott Ruesterholz, a portfolio manager at Insight Investment, which has over $1 trillion in assets under management.   

“While the Fed tailwind for market is diminishing, it remains a tailwind. Combined with the significant excess liquidity in the financial system, that should continue to provide strong technical support for fixed income and markets,” said Ruesterholz, in emailed comments.

Markets will get a big batch of data for Thursday, including weekly jobless claims at 8:30 a.m. Eastern Time, the flash September Markit manufacturing and services purchasing managers indexes at 9:45 a.m. Eastern and leading economic indicators for August.

The White House on Thursday will host a virtual meeting to discuss the global chip shortage, with the CEO of Intel Corp.

 joining executives from Apple Inc.
Microsoft Corp.
Ford Motor Co. 

and others, Reuters reported Wednesday.

Investors are keeping close watch on China Evergrande
the property giant whose troubles sparked a global equity meltdown earlier this week. Shares rose 17% in Hong Kong as that market reopened after a holiday.

Investors are waiting to hear if Evergrande will make an $83.5 million coupon payment due Thursday on its U.S. dollar bonds. Markets welcomed news on Wednesday that its property business would make an interest payment on an onshore bond. 

Beijing regulators issued instructions to Evergrande on Thursday, telling it to focus on repaying investors, completing unfinished properties and avoiding a near-term default on dollar bonds, Bloomberg Law reported.

Property investment firm Chinese Estates said Thursday it would sell its entire stake in China Evergrande, amid concerns over market volatility and the financial stability of the heavily indebted group.

How are other markets trading?
  • The yield on the 10-year Treasury note

    was unchanged at 1.332%. Yields and price move in opposite directions.

  • The ICE U.S. Dollar Index
    a measure of the currency against a basket of rivals, was 0.3% lower at 93.16.

  • Oil futures were lower, with the U.S. benchmark

    down 0.5% to $71.90 a barrel. Gold futures

    dropped 0.3% to around $1,773 an ounce.

  • In Asia, Hong Kong’s Hang Seng Index

    reopened after a one-day holiday to a 1.1% gain, while China’s CSI 300 index

    rose 0.6% and Japan’s Nikkei 225 index

    was closed for a holiday.

  • In Europe, the Stoxx Europe 600 index

    rose 0.9%, while the FTSE 100 index

    gained 0.2%.

This post was originally published on Market Watch

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