Market Snapshot: U.S. stock futures pause after Powell-inspired bounce

by | Dec 1, 2022 | Stock Market

U.S. stock futures on Thursday retraced a tiny part of the previous session’s big bounce as traders awaited important economic data.How are stock-index futures trading
S&P 500 futures
ES00,
-0.08%
dipped 4 points, or 0.1%, to 4077

Dow Jones Industrial Average futures
YM00,
-0.16%
fell 56 points, or 0.2%, to 34543

Nasdaq 100 futures
NQ00,
-0.23%
eased 30 points, or 0.2%, to 12013

On Wednesday, the Dow Jones Industrial Average
DJIA,
+2.18%
rose 737 points, or 2.18%, to 34590, the S&P 500
SPX,
+3.09%
increased 122 points, or 3.09%, to 4080, and the Nasdaq Composite
COMP,
+4.41%
gained 484 points, or 4.41%, to 11468. The Dow Jones Industrial Average rose 20.4% during October and November, the biggest two-month percentage gain since July 1938, according to Dow Jones Market Data.

What’s driving markets U.S. equity futures were a bit softer on Thursday, as investors paused to reflect after a less-hawkish Jerome Powell delivered a strong end to November, and the market awaited important economic data over the next few days. The S&P 500 surged 3.1% on Wednesday following the Fed chairman’s confirmation that a lower pace of rate hikes to combat inflation was more likely in coming months. It took the U.S. stock benchmark’s gains since its 2022 low in mid-October to 14.1%, after recent signs of easing price pressures had encouraged risk appetite once more. “The general upbeat feeling since last month’s soft CPI print has carried into December after stocks surged thanks to a speech from Fed Chair Powell…With markets increasingly predisposed to a terminal rate below 5% and inflation getting back close to target in 2024, the stock market’s rally could extend as pivot hopes should increase with interest rate risk now disproportionately skewed to the downside,” said Stephen Innes, managing partner at SPI Asset Management. “With so much money on the sidelines, fund managers may need to move into catch-up mode, so I suspect the market makers will position to get ahead of this flow in the new year so that the stock market dips will be shallow,” Innes added.

However, investors will be aware that the Fed’s policy trajectory remains dependent on data showing inflation continuing to slow as the economy cools. To that end traders will be keenly eyeing a batch of important data over the next two sessions. Two reports in particular may hold great sway: the October PCE price index, among the Fed’s favored inflation gauges, is released on Thursday at 8:30 a.m.; and the nonfarm payrolls survey will be published on Friday at the same time. Two-year Treasury yields
TMUBMUSD02Y,
4.322%,
which are p …

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