- US stock futures rose on Thursday as investors brushed off inflation and recession fears.
- The S&P, Dow and Nasdaq were all set to open higher, while Treasury yields and the US dollar fell.
- The UK and Japan are officially in recession after two straight quarters of economic declines.
US stocks were poised to open higher on Thursday as investors shrugged off stubborn inflation and bad news on the international front.
S&P 500, Nasdaq 100, and Dow Jones Industrial Average futures were all up about 0.2% shortly after 5.30 a.m. ET. The three key indexes all closed higher on Wednesday, with the S&P 500 breaching 5,000 points once again after data showing unexpectedly high inflation in January sent it slumping earlier this week.
Broad European and Asian indexes climbed to their highest levels in more than a month, despite the revelation that the UK and Japanese economies both contracted for a second consecutive quarter, meaning they’ve officially entered recession.
The key 10-year Treasury yield dipped to 4.22%, after climbing above 4.3% on Tuesday. Meanwhile, the US Dollar Index retreated to 104.63, after hitting a two-month high of nearly 105 on Tuesday.
On the earnings front, Applied Materials, Deere & Company, DoorDash, and DraftKings are all slated to publish reports today.
As for data releases, Wall Street will be looking out for initial jobless claims, two key manufacturing surveys, and retail sales. Fed governor Christopher Waller and the Atlanta Fed’s president, Raphael Bostic, are also scheduled to speak.
“Despite the bulls keeping their faces on, the expectation of Fed rate cuts is not what it used to be at the start of the year,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said in a morning note. She was underscoring that persistent inflation could lead the US central bank to delay when it starts cutting rates and stimulating the economy.
“Investors will focus on retail sales, and some manufacturing indices today to continue guessing when the Fed will move,” she added.
While there’s clear uncertainty over the global economic outlook and the timing of rate cuts this year, investors have remained bullish. Even a notorious market bear seems to be feeling brighter.
“The Big Short’s Michael Burry – who is famous for shorting stocks and who was short the chip stocks last year, short the S&P 500 and short the Nasdaq – has no more short positions in his portfolio according to the latest 13F filings,” Ozkardeskaya said. “The most famous short trader of the history threw in the towel. He is now long health and tech stocks.”
