Market Snapshot: U.S. stock futures rise after blowout tech earnings, Fed meeting


U.S. stock-index futures rose Thursday after a round of upbeat earnings reports from technology heavyweights and as investors weighed dovish remarks by Federal Reserve Chairman Jerome Powell and President Joe Biden’s rollout of a $1.8 billion package of additional government spending.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average

    rose 133 points, or 0.4%, to 33,857.
  • S&P 500 futures

    were up 28.20 points, or 0.7%, at 4,204.50.
  • Nasdaq-100 futures

    jumped 144.25 points, or 1%, to 14,036.50.

On Wednesday, stocks ended with small losses following the Fed meeting, after the S&P 500

notched an intraday record. The Dow

fell 164. 55 points, or 0.5%, while the S&P 500 ended 0.1% lower and the Nasdaq Composite

lost 0.3%.

What’s driving the market?

Corporate earnings remain strong, with Apple Inc.

and Facebook Inc.

delivering much stronger-than-expected results late Wednesday. Some analysts said the results could offer a test for a market that’s struggled to breakout of a sideways trading range.

Thursday is the busiest day of the quarterly earnings reporting season, with roughly 11% of the S&P 500 index due to publish updates. Caterpillar, McDonald’s, Comcast and Merck are among the names expected before the market opens. Amazon and Twitter will post results after the market closes.

Currently about 86% of the S&P 500 companies that have reported beaten estimates, with earnings coming in 22.7% above expectations, according to data from Refinitiv. For revenue, 77% of companies have exceeded expectations.

“This week’s steady but notable rise in Treasury yields could be weighing on U.S. equities and if Apple’s earnings beat is unable to set Wall Street alight, it doesn’t bode well for the rest of the earnings season,” said Raffi Boyadjian, senior investment analyst at XM, in a note.

Treasury yields slipped Wednesday afternoon after the Federal Reserve and Powell struck a dovish tone, but edged higher again Thursday morning. The yield on the 10-year Treasury note
rose 2.7 basis points to 1.65%.

Rising yields can be a headwind, particularly for growth oriented stocks. A rise in yields in March was credited with adding fuel to a rotation away from tech stocks and other highfliers into more cyclical stocks poised to benefit from the reopening of the economy.

Stocks edged higher during Powell’s news conference, with the S&P 500 hitting an all-time high, but ended the day slightly lower.

Read: Fed’s Powell ‘doesn’t blink,’ and 5 other things we learned from his press conference

“With no meaningful change to monetary policy or communication, this meeting was simply a message to market participants to sit back and observe as the economic recovery continues to unfold,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

“For now, the Fed is maintaining a tight grip on the bond market, but it appears like a discussion on tapering bond purchases is right around the corner,” he said, in emailed comments.

Late Wednesday Biden, in an address to a joint session of Congress, called for bigger government investment in the economy, including a $1.8 trillion proposal for additional spending on child care, education and paid leave partly offset by higher taxes on wealthy Americans.

Capitol Report: The word ‘jobs’ appeared more than 40 times in Biden’s first speech to Congress

In U.S. economic data, weekly unemployment benefits claims are due at 8:30 a.m. Eastern. Economists expect initial claims to have fallen to 528,000 in the week ended April 24, down from 547,000 the previous week.

An estimate of first-quarter gross domestic product is also due at 8:30 a.m. Economists expect it to show the economy grew at an annualized rate of 6.5% versus 4.3% in the fourth quarter of 2020.

A March pending home sales index is scheduled for release at 10 a.m.

Which companies are in focus?

Outside the Box: Should you buy AMC stock? These analysts say not at any price

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