Stock Futures Rise After S&P 500, Nasdaq Sets New Records
People walk past the New York Stock Exchange on April 15, 2021 in New York City.
Spencer Platt | Getty Images
Futures linked to major US stock indexes edged higher at the start of overnight trading on Wednesday after the S&P 500 and Nasdaq Composite closed at record highs.
The contracts linked to the S&P 500 and the Nasdaq 100 both ticked north of their respective landlines with gains of less than 0.1%. Dow futures rose 17 points.
Movements in futures came after a steady positive session for US markets.
The S&P 500 rose 0.3% to an all-time high of 4,358.13, while the Dow Jones Industrial Average rose 104.42 points to 34,681.79. The tech-rich Nasdaq Composite closed just above its own flat line to break a closing record.
Popular internet and tech stocks outperformed the broader market again on Wednesday, as investors bought stocks in growth-oriented companies instead of reopening names in the energy and retail sectors. which proved popular in the first half of the year.
Apple, Microsoft and Amazon – up 1.8%, 0.8% and 0.5% on Wednesday – are each up double digits from last month. While traders have cited several reasons for the return to Big Tech, most cite a sharp drop in bond yields when discussing this move.
The decline in the benchmark yield on 10-year Treasuries continued on Wednesday, when the rate fell to 1.296%, its lowest level since February. Higher yields reduce the value of future earnings relative to current earnings, which means that the appetite for growth stocks tends to increase when rates fall.
“The 40 basis point drop in the benchmark 10-year Treasury bond yield since late March suggests that the global yield foreclosure remains a powerful force, despite the Fed’s desire to let the economy run at full capacity diet, “Steven Ricchiuto, Chief of the United States. Mizuho Securities economist, wrote on Tuesday.
“A stronger currency, increased virus problems abroad, and the associated demand for long-term treasury bills and bonds mean lower inflation expectations and increased import risk of global deflation,” he said. he added.
Ahead of Thursday’s session, investors will look at the latest jobless claims figures from the Department of Labor. The weekly update gives Wall Street a regular snapshot of the pace of layoffs in the U.S. economy, which has declined amid the rollout of the Covid-19 vaccine.
Economists expect to see 350,000 new claimants for unemployment benefits for the week ending July 3, according to Dow Jones.