Stock futures rose on Wednesday and rates fell as investors await key economic data reports that will show how the U.S. economy is faring amid the Federal Reserve’s rate hikes to control inflation.
Futures linked to the Dow Jones Industrial Average rose 121 points, or 0.36%. S&P 500 and Nasdaq-100 futures rose 0.57% and 0.79%, respectively. The yield on the 10-year U.S. Treasury fell more than 11 basis points as investors await minutes of the central bank’s latest meeting. Yields and prices move in opposite directions and one basis point equals 0.01%.
Sentiment was bolstered in part by encouraging inflation data from Europe, including a bigger-than-expected fall in the French consumer price index and a drop in German import prices.
US stocks started 2023 on a negative note on Tuesday as worries about rising rates, high inflation and recession fears dashed hopes that Wall Street could start the new year on a note positive The S&P 500 and Nasdaq Composite lost 0.4% and 0.8%, respectively, while the Dow closed just below breakeven. Major indexes were also pressured by sharp declines in shares of Apple and Tesla.
“U.S. stocks failed to hold on to earlier gains as tighter policies and recession fears remained front and center for investors,” Oanda’s senior market analyst wrote on Tuesday, Ed Moya, in a note to clients. “The discount buying led to another bear market rally that didn’t last long.”
Investors will get more information on what Fed members are thinking on Wednesday afternoon as minutes from the central bank’s latest policy meeting are released. Earlier in the day, manufacturing data from the Survey of Job Offers and Job Turnover, or JOLTS, and ISM are due to be released.
Friday’s December jobs report will also be closely watched as it is the last reading on the labor market before the Fed’s meeting in February.
“It’s too early to start betting on a Fed pivot this year and that should make this environment difficult for stocks,” Moya said.