U.S. stock index futures edged higher on Thursday as easing government bond yields lifted high-value growth stocks, as investors awaited trade activity data and testimony from the president. of the Federal Reserve before Congress.
Recession fears gripped Wall Street on fears that economic growth and corporate earnings could be pressured by rising interest rates, the war in Ukraine and protracted supply chain issues.
The S&P 500 confirmed a bear market last week, posting a loss of more than 20% from its January closing peak as the Fed continued its biggest interest rate hike in nearly three decades. The tech-heavy Nasdaq is down more than 31% from its November peak.
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In the previous session, U.S. equity indices posted small losses after Fed Chairman Jerome Powell said the central bank was not trying to cause a recession, but was fully determined to bring it under control. prices, even if it risked causing an economic slowdown.
His second day of testimony before the House Financial Services Committee is at 10 a.m. ET (1400 GMT). Money markets are pricing in a 75 basis point (bp) rate hike next month, followed by a 50 basis point hike in September.
The weekly jobless claims report is due at 8:30 a.m. ET. The S&P Global Composite PMI survey for June will be released after the market opens. Similar surveys conducted earlier in the day showed that manufacturing growth is slowing from Asia to Europe as soaring inflation dampens the global economic outlook.
Meanwhile, the Fed is expected to release the results of its 2022 stress test, which will gauge how much capital banks would need to weather a severe economic downturn. Shares of major banks fell in premarket trading, with Wells Fargo down 0.2%.
As of 6:54 a.m. ET, Dow e-minis were up 141 points, or 0.46%, S&P 500 e-minis were up 27.25 points, or 0.72%, and e-minis Nasdaq 100 were up 125.5 points, or 1.09%.
Tesla Inc rose 2% and Nvidia Corp 1.5% to lead gains among growth and tech companies as Treasury yields retreated.
Occidental Petroleum Corp gained 3.3% after Warren Buffett’s Berkshire Hathaway Inc bought an additional 9.6 million shares of the oil company, taking its stake to 16.3%.
Snowflake Inc climbed 5.1% after JP Morgan upgraded the cloud software company’s shares from “overweight” to “neutral”.