October 1, 2022

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Stock futures extend gains, with focus on Fed

Stock futures extend gains, with focus on Fed

US stock futures rose on Friday morning, as investors continued to consider the next policy moves by the Federal Reserve.

Contracts in the S&P 500 pointed to a higher open to build on Thursday’s gains and shake off volatility from earlier this week. However, as of Thursday’s close, the S&P 500 was on track to post a weekly loss that would end a three-week winning streak, if levels hold until Friday’s close.

New comments from Federal Reserve officials remained in focus, as another group of speakers provided a mixed set of comments on the policy path moving forward for the central bank. St. Louis Federal Reserve Chairman James Bullard said Thursday He wanted the Fed to reach between 3% and 3.25% on the fed funds rate in the second half of this year, which would mean more aggressive rate hikes and carry them up front in the near term. Pollard was the only dissident at the Fed’s March meeting, calling for a 50 basis point rate hike versus the 25 basis point hike that eventually occurred.

While Pollard was now a long-term hawk seeking greater action from the Federal Reserve to rein in inflation, earlier comments this week suggested that other members of the central bank were also receptive to the idea of ​​tightening policy. Fed Governor Lyle Brainard said the FOMC was “Ready to take stronger action,” Inflation readings should remain high and warrant such moves. In the Federal Reserve’s meeting minutes released on Wednesday afternoon, the central bank revealed that “many participants … would have preferred a 50 basis point increase” in rates, and also indicated that the Fed was preparing to announce soon the start of its balance-flow process. surface of the paper.

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However, other Fed officials offered a more subtle method of raising interest rates. In Thursday’s statement, Atlanta Federal Reserve Chairman Rafael Bostic He said it would be “appropriate” to move the benchmark interest rate “closer to a neutral position,” indicating a somewhat less hasty slate of rate hikes. Meanwhile, Chicago Fed President Charles Evans suggested that the Fed would be able to “get to neutrality, look around, and discover that we’re not necessarily far from where we need to go.”

Taken together, the confluence of comments helped stocks at least temporarily halt their recent bouts of volatility from earlier this week, and kept Treasury yields stable after a sharp upward rally. The benchmark 10-year yield settled around 2.6%, its highest level since 2019.

“The market has actually had to absorb a lot of information — a lot of hawkish information from the Fed over the last couple of days. We’ve been in a sell position. And I think [Thursday] We finally got a chance to take a break and realize that stock markets in particular have some really positive things going on,” Kevin Nicholson, chief global fixed income investment officer at Riverfront Investment Group, said. Yahoo Finance Live on Thursday. “We continue to expect earnings season to be better than expected… We also believe you have support with a strong job market.” The economy is in good shape from this perspective. “

“We expect the stock markets to rebound,” he added. “And we’re actually looking forward to them getting back to their highs of 4800 over the few months, especially as they get more clarity from the Federal Reserve. As we all know, stock markets don’t like uncertainty.”

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7:40AM ET Friday: Stock futures rise, adding to Thursday’s gains

Here’s where the markets are trading on Friday morning:

  • S&P 500 futures contracts (ES = F.): +14 points (+0.31%) to 4510.25

  • Dow futures contractsYM = F.): +130 points (+0.38%) to 34620.00

  • Nasdaq futures contractsNQ = F.): +44.25 points (+0.3%) to 14,580.25

  • raw (CL = F.): + $0.03 (+0.03%) to $96.06 per barrel

  • gold (GC = F.):- $3.30 (-0.17%) to $1,934.50 per ounce

  • Treasury for 10 years (^ degeneration): +1.6 basis points to produce 2.67%

6:14pm ET: Thursday: Stock futures drift sideways

Here is where the major index futures traded Thursday evening as the evening session began:

  • S&P 500 futures contracts (ES = F.): +2.25 points (+0.05%) to 4498.50 points

  • Dow futures contractsYM = F.): +12 points (+0.03%) to 34502.00

  • Nasdaq futures contractsNQ = F.): +13 points (+0.09%) to 14,549.00

NEW YORK, NY – APRIL 01: Traders work on the floor of the New York Stock Exchange during afternoon trading on April 1, 2022 in New York City. US stocks closed higher on the first day of trading for the second quarter of 2022 after the Labor Department released a jobs report that showed an increase well above pre-pandemic trends. (Photo by Michael M. Santiago/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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