After two straight days of losses, U.S. stock index futures gained on Wednesday. Advanced by President Donald Trump controversy-free State of Union speech with investors’ attention back on quarterly earnings and monetary policy.
On Monday and Tuesday, the blue-chip Dow Jones Industrial Average suffered its largest two-day drop since September 2016. Treasury yields rose close to four-year highs on expectations that global central banks will lower stimulus. The pace of the increase in yields has caused injury to stock markets. An increase in yields raises borrowing costs and provides traders with another option of investment.
The Federal Reserve’s two-day meeting comes to an end Wednesday and a statement will be made at 2 p.m. EST. Many will focus on the statement for clues regarding central bank’s economic and interest rate hike outlook. There are three rate hikes priced in for this year, currently.
At 7:04 a.m. EST: Dow e-minis were up 90 points, or 0.35 percent, with 41,952 contracts changing hands. S&P 500 e-minis were up 9 points, or 0.32 percent, with 174,673 contracts traded. Nasdaq 100 e-minis were up 20.75 points, or 0.3 percent, on volume of 42,024 contracts.
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As Trump gave his State of the Union speech late on Tuesday, U.S. stock index futures gained. Also, in his speech, Trump suggested legislation to generate at least $1.5 trillion for infrastructure spending and came back to an earlier campaign promise to lower the price of medications.
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As for stocks, Boeing shares increased 3.6 percent during premarket follow the company’s report of a higher core profit and the forecast of increasing plane deliveries this year.
Advanced Micro Devices rose 2.1 percent after the chipmaker’s fourth-quarter results surpassed forecasts the day earlier.
Electronic Arts surged 7.8 percent after the company forecast its fourth-quarter revenue was higher than previous analysts’ estimates.
Earnings have been off to a great start. S&P 500 earnings growth is forecast at 13.2 percent, up from last month’s 12 percent. Out of the companies that have reported thus far, 80 percent have exceeded analysts’ expectations, according to data.
Microsoft and Facebook are scheduled to report results after Wednesday’s close.