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Stock-index futures traded higher on Wednesday, with bulls looking to build on a bounce a day after the S&P 500 and Nasdaq Composite broke four-day losing streak.
What are major benchmarks doing?
Futures on the Dow Jones Industrial Average YM00, +0.69% rose 225 points, or 0.8%, to 27,368, while S&P 500 futures ES00, +0.30% gained 15.45 points, or 0.5%, to trade at 3,314.75. Nasdaq-100 futures NQ00, -0.10% were up 30.50 points, or 0.3%, at 11,180.
On Tuesday, the Dow DJIA, +0.51% rose 140.48 points, or 0.5%, to end at 27,288.18, while the S&P 500 SPX, +1.05% finished 34.51 points higher, up 1.1%, at 3,315.57. The Nasdaq COMP, +1.71% gained 184.84 points, or 1.71, to close at 10,963.64.
What’s driving the market?
Stocks began the week by extending a slide, taking the S&P 500 within a whisker of a correction — defined as a 10% pullback from a recent peak — during Monday’s session before ending off of session lows. Equities then appeared to find their footing in Tuesday’s session, rallying in afternoon trade. Tech stocks, which have suffered a sharp pullback in September as investors dumped 2020’s highest flyers, led the bounce back by equities on Tuesday.
Skeptics argued the turnaround was unconvincing, with few catalysts capable of refueling the rally seen on the horizon.
“The U.S. presidential election is just weeks away and the tight race, combined with worries about fraud from postal voting, has sparked talk that whoever loses will contest the result, leading to a potentially prolonged period of uncertainty,” said Raffi Boyadjian, senior investment analyst at XM, in a note.
Simmering tensions between the U.S. and China also remain a potential source of weakness for stocks, he said, noting that Trump used his address at the annual U.N. General Assembly to blame China for “unleashing” the coronavirus onto the world, while Beijing looks increasingly likely to block the takeover of TikTok by U.S. companies, potentially heightening the standoff.
Opinion:The TikTok geopolitical soap opera is a confusing mess — even by Trump standards
Federal Reserve Chairman Jerome Powell on Tuesday told lawmakers that further fiscal stimulus would likely be needed to prevent a slowing of the economy in coming months and reiterated the central bank stood ready to support the economy for as long as necessary.
Powell will be testifying again Wednesday, this time before the House Select Subcommittee on the Coronavirus Crisis, at 10 a.m. Eastern. Before that, Cleveland Federal Reserve Bank President Loretta Mester is scheduled to deliver a speech on the payments system in Chicago at 9 a.m. Eastern.
September purchasing managers index readings are set for release at 9:45 a.m. Eastern. Investors will also hear from several other Fed speakers at various events, including remarks by Chicago Fed President Charles Evans on the economy at 11 am. Eastern; Boston Fed President Eric Rosengren at Noon Eastern; Atlanta Fed President Raphael Bostic at 1 p.m. Eastern; and Fed Vice Chairman for Banking Supervision Randal Quarles, who is slated to deliver a speech on the economic outlook at the annual meeting of the Institute for International Bankers at 2 p.m. Eastern.
Which companies are in focus?
- Shares of Dow component Nike Inc. NKE, +3.08% jumped more than 13% in premarket trade after the athletic apparel company delivered results late Tuesday that easily beat Wall Street forecasts.
- Stitch Fix Inc. SFIX, +7.98% shares fell ahead of the bell after the provider of clothing and accessories subscriptions reported a bigger quarterly loss than expected.
- Shares of Tesla Inc. TSLA, -5.59% dropped more than 4% in premarket trade after the electric-auto maker unveiled innovations and increased efficiencies that appeared to underwhelm investors late Tuesday at its “Battery Day” event.
