U.S. stock futures were extending gains for the week as anxiety about the banking sector eased and traders eyed the looming Federal Reserve rate decision.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.36%
rose 14 points, or 0.4% to 3997 -
Dow Jones Industrial Average futures
YM00,
+0.45%
added 86 points, or 0.3% to 32542 -
Nasdaq 100 futures
NQ00,
+0.10%
climbed 28.50 points, or 0.1% to 12710
On Monday, the Dow Jones Industrial Average
DJIA,
rose 383 points, or 1.2%, to 32245, the S&P 500
SPX,
increased 35 points, or 0.89%, to 3952, and the Nasdaq Composite
COMP,
gained 45 points, or 0.39%, to 11676.
What’s driving markets
Calmer conditions in the financial sector was helping support sentiment on Tuesday. Investors have welcomed the market’s ability to absorb the rescue takeover of Credit Suisse
CS,
by UBS
UBS,
whose shares rose over 3% in Europe early Tuesday.
The shotgun-wedding of a failing systemically important bank and its peer intially rattled stocks at the start of the week.
But the S&P 500 finished Monday up 0.9% as many recently battered banking shares rallied in the U.S. and Europe — the latter helped in particular by central banks clarifying the position of higher risk bonds in the capital structure.
Reports that the U.S. Treasury is considering boosting the guarantees on bank deposits was also helping the mood.
Easing tensions in the financial sector makes it more likely the Federal Reserve will raise interest rates on Wednesday, said analysts. The central bank’s two-day meeting begins Tuesday.
“[T]he more positive shift in sentiment saw investors put growing weight on the probability of the Fed hiking rates tomorrow,” said Jim Reid, strategist at Deutsche Bank.
“Our own U.S. economists published their preview of tomorrow’s Fed meeting, and they agree with the view that the Fed will opt for 25bps [basis points]. Our economists expect the Fed to follow the ECB’s lead and raise rates in line with expectations, do away with forward guidance, but signal a continued tightening bias,” Reid added.
U.S. economic updates set for release on Tuesday include existing home sales for February, due at 10 a.m..
And: The bank panic of 2023 could be just what the stock market needs to make money for investors again
