New York Stock Exchange Floor Trader, March 17, 2022.
Brendan MacDermid | Reuters
In Tuesday’s overnight trading, US equity futures have changed little as investors continue to digest exposures from the Federal Reserve on inflation and interest rates.
Dow futures have risen by only 30 points. S & P 500 futures rose 0.1% and Nasdaq 100 futures were flat.
Key averages rose as investors evaluated recent comments from Federal Reserve Chief Jerome Powell on Tuesday. Last week, the Fed forecasts to raise interest rates for the first time since 2018, raising interest rates by a quarter point at each of the remaining six meetings in 2022.
But then Powell seemed to further enhance his rhetoric when he promised to take harsh action against inflation on Monday.
“The labor market is very strong and inflation is too high,” the central bank governor told the National Association for Business Economics. “If we conclude that it is appropriate to act more aggressively by raising the federal funds rate by 25 basis points or more at one or more meetings, we will do so.”
The Dow Jones Industrial Average rose by more than 250 points on Tuesday. This is due to Nike’s share price rising 2.2% from strong earnings. S & P 500 rose 1.1%.
The Nasdaq Composite is relatively outperforming, rising 2% as Metaplatform, Amazon, Apple, Netflix and Google’s parent alphabet all closed at high prices.
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Tuesday’s benchmark 10-year Treasury yield reached a session high of 2.39%, the highest level since May 2019.
Jim Paulsen, chief investment strategist at Loithold Group, said: “Investors seem to have little concern about the stock market’s surge in bond yields and the daily bullish Federal Reserve. The attitude is getting stronger. “
The S & P 500 is only 5% off its record, surpassing both the 50-day and 200-day moving averages.
Still, renowned activist investor Carl Icahn said Tuesday that a recession could come.
Icahn, founder and chairman of Icahn Enterprise, told Scott Wappner about CNBC’s “Closing Bell Overtime.”
On the economic front, new home sales data for February will be released Wednesday at 10am.
Generals Mills, Cintas and Tencent Holdings will report their quarterly results before the bell on Wednesday. KB Home reports after the bell.