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U.S. stock futures traded at mixed levels hours before the opening bell on Thursday, one day after the Dow ended in a record high for the first time and crossed the 33,000 plateau, and after comments from U.S. Federal Reserve Chairman Jerome Powell, said that the key interest rate would remain almost zero until 2023.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| Ek: DJI | DOW JONES AVERAGE | 33015.37 | +189.42 | + 0.58% |
| SP500 | S&P 500 | 3974.12 | +11.41 | + 0.29% |
| I: COMP | NASDAQ COMPOSITION INDEX | 13525.202471 | +53.64 | + 0.40% |
Powell’s remarks at a news conference reassured investors worried about higher inflation could encourage central banks to raise rates, which could weigh on economic growth.
“The market response indicates that investors are satisfied with the Fed’s statements,” Tai Hui of JP Morgan Asset Management said in a report. “Inflation is expected to rise in the coming months, and the Fed may need to provide more holdings to the market during this price increase.”
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Central banks traditionally respond to higher pressures to raise rates by raising interest rates. But Fed officials have said they will let the US economy “run hot” to make sure a recovery is taking effect.
Prior to its comments on Wednesday, yields on the 10-year US Treasury bond, or the difference between the market price and the payout on maturity, increased to 1.68%, the highest level since January 2020.
Yields fell and shares rose after Powell spoke.
U.S. stock futures traded higher hours ahead of the opening bell on Thursday, one day after the Dow ended in a record high for the first time and crossed the 33,000 plateau, and after comments by U.S. Federal Reserve Chairman Jerome Powell,
The S&P 500 rose to 3,974.12 and recovered to a 0.7% slide. The Dow Jones industrial average rose 0.6% to 33,015.37. The Nasdaq rose 0.4% to 13,525.20.
Banks, industrial stocks and companies that rely on consumer spending have helped boost the market. These gains outweigh a disadvantage in healthcare, utilities and other sectors.
Investors are betting big that the economic woes will go away as spring approaches and more Americans are vaccinated against the coronavirus. The $ 1400 incentive that Biden’s government began sending to individuals last weekend also helps. But faster economic activity can also lead to some inflation.
Fed policymakers predict that unemployment will fall from 6.2% to 4.5% by the end of the year and to 3.9% by the end of 2022.
This indicates that the central bank will be close to its targets by 2023, when it expects inflation to exceed its target of 2% and unemployment to be 3.5%. Yet it still offers no rate hike.
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Meanwhile, Asian stock markets followed Wall Street higher on Thursday.
Standards in Shanghai, Tokyo and Hong Kong have progressed. Sydney withdrew.
The Shanghai Composite Index rose 0.6% to 3,465.85 and the Nikkei 225 in Tokyo rose 0.9% to 30,192.11. The Hong Kong Hang Seng added 1.5% to 29,474.61.
The Kospi in Seoul increased by 0.7% to 3,068.01, while the S&P-ASX 200 of Sydney decreased by 0.7% to 6,745.90.
India’s Sensex rose 0.5% to 50,043.87. New Zealand also declined as Southeast Asian markets advanced.
Investors are worried that inflation could accelerate after governments flooded dormant economies with extra spending and credit to stem the deepest global slump since the 1930s.
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In the energy markets, standard U.S. crude oil lost 36 cents to $ 64.24 a barrel of electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to $ 64.60 on Wednesday. Brent crude oil, the basis for international prices, fell 41 cents in London to $ 67.59 a barrel. That dropped the previous session by 39 cents to $ 68.
The dollar rose to 108.90 yen from Wednesday’s 108.86 yen. The euro fell to $ 1.1967 from $ 1.1979.