Futures of U.S. stocks rose on Wednesday as investors expected more testimony from Federal Reserve Chairman Jerome Powell and economic data on the pace of recovery.
Futures linked to the S&P 500 index and the blue-chip Dow Jones Industrial Average rose 0.4%. Nasdaq-100 futures rose 0.7%, suggesting tech stocks could regain some ground after falling on Tuesday.
Markets have rocked this week as investors reflected on signs that the global economic recovery may take longer than expected due to rising Covid-19 cases and prolonged closures in many countries. Money managers are also assessing rich stock valuations after major indices rose more than 70% since the pandemic-fueled defeat last March.
“We’re now a year away from this rally: we’ve seen a massive decline and a massive rally, and my feeling is that the markets will just pause to breathe from here,” Brian O said. ‘Reilly, head of market strategy at Mediolanum International Funds. “Earnings will be much harder to achieve the rest of the year.”
Despite Mr Powell’s comments that the Fed will continue to support the economy until the recovery is stronger, money managers are also betting on inflation to rise sharply and could encourage the central bank to raise interest rates or curb bond purchases.