Inventory futures blended in after modest positive factors on Wednesday
US stock futures were mixed early Thursday morning as traders watched interest rates and the ongoing turmoil in Washington.
Dow Jones Industrial Average futures traded 96 points higher. S&P 500 futures were trading above the flatline while Nasdaq 100 futures were trading slightly in negative territory.
Earlier in the day, the S&P 500 and Nasdaq Composite were up 0.2% and 0.4%, respectively. The Dow, meanwhile, closed flat.
Gains for the S&P 500 and Nasdaq on Wednesday came after Intel rose nearly 7% to lead tech stocks higher. They also followed U.S. interest rates, which fell from their highest level since March 2020.
The benchmark yield on 10-year debt fell to 1.09% per day after hitting a high of 1.18%. This fall in interest rates was due to two key officials from the Federal Reserve saying that monetary policy will remain simple for the foreseeable future.
The Fed vice chairman said the central bank won’t raise rates until inflation hits 2%. Meanwhile, St. Louis Fed President James Bullard noted that there will be a time when policy will need to be tightened. “But boy, I don’t want to set an exact date at this point.”
Interest rates have risen this year amid prospects of increased fiscal stimulus in the US after Democrats secured a majority in both the House and Senate. Inflation expectations have also increased recently.
“We believe US inflation will be higher than expected in the next few years,” wrote Adam Hoyes, Assistant Economist at Capital Economics. “At the same time, we believe investors are overestimating how quickly the Fed will allow monetary conditions to tighten. The new flexible framework for the Fed’s average inflation target suggests that inflation will rise above 2% in the coming years . “”
Investors are also watching Washington when members of the House of Representatives voted to indict President Donald Trump a second time – making him the first U.S. president to be indicted twice – when a bipartisan majority accused him of a riot in the U.S. last week. To have instigated the Capitol.
However, the market has largely shaken off the political and civil unrest in its brow.
“Normally we would expect risk-weighted assets to pull out during an event like this, but the market appears to be more focused on the next administration at this point,” said Brian Price, head of investment management for the Commonwealth Financial Network. “”
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