U.S. Stock Futures Jump as Traders Take Powell Remarks in Stride
U.S. Stock Futures Jump as Traders Take Powell Remarks in Stride
(Bloomberg) -- U.S. stock index futures rose as traders took Federal Reserve Chair Jerome Powell’s hawkish comments in their stride, while continuing to assess the potential economic impact from the omicron virus strain.
December contracts on the Nasdaq 100 gained as much as 1.6%, recovering the previous session’s loss. Contracts on the S&P 500 rose 1.2%, while those on the Dow Jones Industrial Average added 0.9%.
The rebound came after U.S. stocks sank on Tuesday as Powell told Congress that policymakers will discuss whether to wrap up bond purchases a few months earlier, prompting traders to boost their wagers on the pace of interest-rate hikes. Powell -- who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces -- said that it’s “probably a good time to retire that word.”
“It seems too early to read too much into his comments from yesterday,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo. “The FRB is still in the midst of figuring things out, as the impact of the omicron variant is yet unknown.”
European stocks bounced today, with the Stoxx 600 rising 1.2%, led by travel and leisure shares, while miners and energy also outperformed on a boost from commodities.
READ: Powell Testimony Isn’t Positive for Stocks Anywhere, Rodda Says
“Market participants seem to have recovered from the initial shock and the words of warning from U.S. Fed chairman Powell have also been priced in,” said Andreas Lipkow, Comdirect Bank strategist. “Investors are looking ahead again and are positioning themselves accordingly by buying potential recovery candidates.”
©2021 Bloomberg L.P.