Wall Street heads for more gains as bond selling takes a break, with more profits on the way

U.S. stock index futures rose on Wednesday as bond selling eased ahead of the latest inflation report due Thursday, and investors awaited another big batch of earnings reports.

How are stock index futures traded?
  • S&P 500 ES00 futures contracts,
    +0.73%
    increased by 0.7% to 4,543

  • Futures contracts Dow Jones Industrial Average YM00,
    +0.53%
    rose 0.6%, or 200 points, to 35,544

  • Nasdaq-100 NQ00 futures,
    +1.01%
    gained 0.8% to 14,855

Tuesday’s action saw Dow industrialists DJIA,
+1.06%
climb 371.65 points, or 1.1%, to close at 35,462.78, its best daily gain since Jan. 31. The S&P 500 SPX,
+0.84%
rose 0.8% to end at 4,521.54 for its best day since February 2. The Nasdaq Composite COMP,
+1.28%
climbed 1.3% to end at 14,194.45.

What drives the markets?

On Wednesday, investors were enjoying a break after a recent bond sell-off. The yield of the TMUBMUSD10Y Treasury note,
1.925%
was last down 4 basis points at 1.919% after hitting 1.954% on Tuesday, its highest since 2019.

But investors are still keeping an eye on the key 2% level, especially as important inflation data looms for Thursday. Annual consumer price inflation is expected to hit 7.2% in January, after hitting a 40-year high of 7% in December.

Read: ‘It’s not 1980’: What investors are watching as the next US inflation reading looms

“The improved sentiment is driven by greater optimism about the reopening, while hawkish Fed expectations and rising yields continue to be a serious threat to real gains as key triggers for the latest bond sales are still in play,” said Ipek Ozkardeskaya. , senior analyst at Swissquote, in a note to clients.

“That means there’s a high risk of a sudden mood swing ahead of Thursday’s US inflation data,” she said.

Investors are also looking for more revenue on Wednesday, from CVS Health Corp. CVS,
+1.30%,
Yum Brands Inc. YUM,
-0.09%
before the open, followed by The Walt Disney Co. DIS,
-0.02%
and MGM Resorts International MGM,
+3.49%
after market close.

Read: After the “baptism of fire”, the CEO of Disney seeks a rebound

What actions are targeted?
  • Shares of Chipotle Mexican Grill Inc.
    GCM,
    +0.51%
    rose 6% in premarket trading after the fast-food chain more than doubled its profits to a record high in 2021, and talked about expansion plans.

  • Mandiant inc.
    MNDT,
    +17.86%
    Shares rose more than 2% after the cybersecurity software and services company reported better-than-expected results. Shares rose during Tuesday’s regular session following a report that Microsoft Corp. MSFT,
    +1.20%
    was in talks to buy the company.
  • Lyft Inc.
    LYFT,
    +5.37%
    Shares fell 3% after the ride-hailing operator hit its positive full-year EBITDA target and spoke of a “strong” fourth quarter, but offered a cautious outlook.
How are other assets trading?
  • The ICE US Dollar Index DXY,
    -0.16%,
    a measure of the currency against a basket of six major rivals, fell 0.2%.

  • West Texas Intermediate crude for delivery in March CL.1,
    -0.46%

    CLH22,
    -0.46%
    slipped 0.5% to $88.90 a barrel. Gold futures for April delivery GC00,
    -0.03%

    GCJ22,
    -0.03%
    were flat at $1,827.60, near its Tuesday close, which was the highest active contract settlement since Jan. 26, according to FactSet data.

  • BitcoinBTCUSD,
    -1.09%
    was down 0.3%

  • The Stoxx 600 Europe SXXP,
    +1.46%
    rose 1.5%, while the FTSE 100 UKX,
    +0.67%
    gained 0.5%.

  • The Shanghai Composite SHCOMP,
    +0.79%
    rose 0.7%, while the Hang Seng HSI00 index,
    -0.54%
    jumped 2% and Japan’s Nikkei 225 NIK,
    +1.08%
    increased by 1%.

About Troy McMiller

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