US Stock Indexes

US Stock Futures Choppy Ahead of Consumer Inflation Report

U.S. stock index futures are posting two-sided performances early Wednesday following a sharp rise the previous session amid a dip in Treasury bond yields.

At 09:29 GMT, March E-mini S&P 500 Index futures are trading 3868.75, up 5.25 or +0.14%. This is up from a low of 3847.00. March E-mini Dow Jones Industrial Average futures are at 31785, up 88 or 0.28%. This is up from a low of 31613. March E-mini NASDAQ Index futures are trading 12767.75, down 10.25 or -0.08%. This is up from a low of 12711.00.

Mixed performances in the Asia-Pacific region and in Europe are contributing to the choppy price action.

Tuesday’s Recap

The major U.S. stock indexes rallied on Tuesday, with the NASDAQ gaining nearly 4% to recoup heavy losses from the previous session as U.S. bond yields retreated and investors jumped back into beaten up technology stocks. Technology shares also helped the blue chip Dow Jones Industrial Average reach a record intraday high.

Easing Treasury Yields Set the Tone

U.S. 10-year Treasury note yields eased to as low as 1.523% after hovering near 13-month highs of 1.613% on Monday. Longer-dated yields have jumped over the last month as investors price in a faster rebound and higher inflation. The price action suggests investors may be adjusting to the new level in interest rates.

US Fiscal Stimulus Boosts Investor Confidence

House Democrats aim to pass the $1.9 trillion coronavirus relief bill Wednesday. President Joe Biden is expected to sign the legislation in time to beat a Sunday deadline to renew unemployment aid programs. After a shaky reaction to this news, investors may be finally accepting that the economic recovery is still fragile and needs the relief package to steady growth.

If you recall, news that a $1.9 trillion coronavirus relief package was nearing final approval sparked a spike in yields on Monday, pushing the tech-heavy NASDAQ to end more than 10% below its February 12 closing high, confirming a correction for the index.

US Inflation Data On Tap for Wednesday

Investors will monitor Wednesday’s inflation data to gauge if price pressures are running hot. Higher inflation expectations have been pushing bond yields higher, which put pressure on risk assets, especially high-growth tech stocks.

Rising rates disproportionately hurt high-growth tech companies because they are valued on earnings expected years into the future rather than profits earned in the short-term.

February’s consumer price index is expected to rise 0.4% in February, or up 1.7% from a year ago, according to economists surveyed by Dow Jones. The data is slated for release at 13:30 GMT. That compares to a 0.3% increase in January, and a 1.4% rise on an annual basis.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.