U.S. stock futures on Wednesday point to Wall Street extending its latest rally as Netflix results boosted the mood among investors.
How are stock index futures trading
-
S&P 500 futures
ES00,
+0.18%
rose 14 points, or 0.4%, to 3952 -
Dow Jones Industrial Average futures
YM00,
+0.13%
gained 98 points, or 0.3%, to 31889 -
Nasdaq 100 futures
NQ00,
+0.32%
climbed 46 points, or 0.4%, to 12320
On Tuesday, the Dow Jones Industrial Average
DJIA,
rose 754 points, or 2.43%, to 31827, the S&P 500
SPX,
increased 106 points, or 2.76%, to 3937, and the Nasdaq Composite
COMP,
gained 353 points, or 3.11%, to 11713. Showing the breadth of gains, 491 components of the S&P 500 advanced.
What’s driving markets
Investors are hoping that a survey showing fund managers at their most bearish since the great financial crisis means sentiment can only improve from here, sparking a further rally off recent lows for stocks.
Despite recession concerns, riskier plays are back in demand. The Russell 2000
RUT,
of small cap stocks jumped 3.5% on Tuesday, its best gain in more than 18 months.
The S&P 500 and Nasdaq 100 sit above their 50-day moving averages for the first time in nearly three months, potentially signalling the downtrend — which saw the market shed more than 20% so far this year — has been finally broken.
“Fears of a damaging U.S. recession also have receded a little in the rear view mirror with Wall Street closing at a three-week high following some more upbeat earnings reports,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Netflix stock
NFLX,
is in line for a strong open after it became the latest company to deliver well-received results. The most anticipated earnings report on Wednesday will be Tesla
TSLA,
which presents its numbers after the closing bell.
“Investors are clinging onto any positive news they can but the claws of the bear market have scratched deep. There will need to be plenty more signs that a recession could be avoided and inflation is being brought under control before US indices can emerge from its clutches,” added Streeter.
Still, a number of other supportive factors continue to reverberate on Wednesday. Investors have been fretting that a stronger dollar will crimp corporates’ foreign earnings. But after hitting a 20-year high above 109 last week, the dollar index
DXY,
has softened to 106.54. The retreat comes partly in response to the euro
EURUSD,
strengthening on expectations of a bigger than expected 50 basis point rate hike by the European Central Bank on Thursday.
There is also better news regarding the energy crisis in Europe. “The eventual reopening of the Nord Stream 1 [gas] pipeline is one of the sources of renewed risk appetite,” said Stephen Innes, managing partner at SPI Asset Management.
“There has been a massive multi-level sigh of relief across global capital markets that Russian gas will flow back to Europe, triggering a convincing….bear market relief rally,” he added. The Stoxx 600
SXXP,
in Europe rose 0.4%.
U.S. existing home sales data will be published at 8.30 a.m. Eastern.
How are other assets faring
-
Oil futures were lower with U.S. crude futures
CL.1,
-1.46%
off 1.8% to $102.40 a barrel. -
The 10-year Treasury yield
TMUBMUSD10Y,
2.987%
rose 2 basis points to 2.953% and U.K. 10-year yields
TMBMKGB-10Y,
2.083%
added 2.2 basis points to 2.180% after a report showed inflation in Britain hitting a fresh 40-year high of 9.4% in June. -
Gold
GC00,
-0.01%
fell 0.3% to $1706 an ounce. -
Bitcoin
BTCUSD,
+2.04%
advanced 1.7% to $23709, a five-week high. -
Asian markets got a lift from Wall Street’s powerful showing overnight, with tech leading the way. Hong Kong’s Hang Seng
HSI,
+1.11%
rose 1.6%, the Shanghai Composite
SHCOMP,
+0.77%
climbed 0.8%, and Japan’s Nikkei 225
NIK,
+2.67%
jumped 2.7%.
