U.S. stock futures moved to three-week highs Thursday after news of softer European inflation pushed bond yields lower.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.37%
rose 14 points, or 0.4%, to 4072 -
Dow Jones Industrial Average futures
YM00,
+0.41%
climbed 120 points, or 0.4%, to 33023 -
Nasdaq 100 futures
NQ00,
+0.26%
gained 24 points, or 0.2%, to 12989
On Wednesday, the Dow Jones Industrial Average
DJIA,
rose 323 points, or 1%, to 32718, the S&P 500
SPX,
increased 57 points, or 1.42%, to 4028, and the Nasdaq Composite
COMP,
gained 210 points, or 1.79%, to 11926.
What’s driving markets
“Another day without any unwelcome banking surprises lifted markets as investors headed back towards a risk-on approach,” said Richard Hunter. head of markets at Interactive Investor.
The S&P 500 closed on Wednesday back above the 4,000 mark — and higher than the level seen before problems at Silicon Valley Bank became widely known to the market three weeks ago — as worries about the financial sector have subsided.
The CBOE VIX index
VIX,
a gauge of expected stock market volatility, sits around 19 and close to its lowest for a month.
“That suggests confidence is rebuilding among investors who have been shaken by the rapid unfolding of issues concerning a handful of U.S. and European banks, and as expectations for interest rates once again swerved in a new direction,” said Russ Mould, investment director at AJ Bell.
The relative lack of banking drama allowed traders to turn their minds back to inflation and the prospects for Federal Reserve monetary policy.
“The next economic test comes on Friday, as the Federal Reserve’s preferred measure of inflation, the personal consumption expenditures index is released. The general expectation is for the number to have moderated further, although still remaining at levels which will suggest that the Fed’s aim of taming inflation has not quite yet been achieved,” Hunter added.
Indeed, better news on inflation out of Europe on Thursday has given a further boost to sentiment.
German 10-year bund yields
TMBMKDE-10Y,
fell sharply, helping push U.S. peers
TMUBMUSD10Y,
down 3.4 basis points to 3.544%, after data showed a decelerating pace of German regional consumer price rises and Spanish inflation also dropping more than expected.
U.S. economic updates set for release on Thursday include the weekly initial jobless claims and the second revision of fourth quarter GDP, both due at 8:30 a.m. Eastern.
There will also be a batch of Fed officials making comments. Boston Fed President Collins and Richmond Fed President Barkin are speaking at 12:45 p.m., with Minneapolis Fed President Kashkari taking the mic at 1 p.m.
The Fed will release its H.4.1 report on bank lending at 4.30 p.m.
