Dow futures rise Wednesday, with benchmark aiming for 5th straight gain

What’s driving the market?

Investors may struggle to push U.S. equity markets much further toward all-time highs in June, as Wall Street begins to weigh second quarter performance by American corporations against evidence of supply chain problems forming in the wake of the COVID pandemic.

Stock markets have been drifting higher as new cases of COVID-19 decline with vaccine rollouts in the U.S. but last month’s Labor Department employment report implied that growth in employment may be stagnating.

The seven-day average for new cases in the U.S. has fallen 45% from two weeks ago, according to a New York Times tracker, and deaths have dropped 44%, with hospitalizations down 22%.

The number of Americans fully vaccinated increased to 135.9 million, or 40.9% of the total population, while the number of people who are at least 18 years old who have been fully vaccinated grew to 133.6 million, or 51.7% of the population, according to data from Johns Hopkins University.

Some analysts think U.S. stock market indexes are likely to remain in a trading range until Friday’s May nonfarm payrolls report is released. April’s report was estimated to have added around 1 million jobs, but instead badly missed forecasts at 266,000 jobs and the rate of unemployment inched up to 6.1%.

“Markets are in a bit of a limbo waiting for new Nonfarm Payrolls data on Friday and signals from the Fed policymakers, wrote Alex Kuptsikevich, senior market analyst, at FXPro, in a daily note.

“For the last week, the Nasdaq100 and S&P500 have been gradually shedding on low volumes, reflecting investor wariness in anticipation of a new signal,” the analyst said.

Looking ahead, investors will be watching for a speech from Philadelphia Fed President Patrick Harker speech on the economic outlook to Women in Housing and Finance at noon Eastern.

Chicago Fed President Evans, Atlanta Fed President Bostic and Dallas Fed President Kaplan will discuss the impact of racism and the economy at 2 p.m. Eastern.

The Fed Beige Book’s report on current economic conditions will be released at 2 p.m., and ahead of that the University of California at Los Angeles’s latest economic forecast is due at 11:30 a.m.

Which companies are in focus?

• Shares of Lands’ End Inc. LE were indicated up premarket trading Wednesday, after the casual clothing and accessories retailer swung to a surprise profit with sales growing 48%, as the recovery in its Outfitters business is occurring at a faster-than-forecast pace.
• Advance Auto Parts Inc. AAP reported fiscal a first-quarter adjusted profit that more than tripled and beat expectations, boosted by record sales growth amid strong demand from do-it-yourself and professional customers. 
• Shares of Donaldson Co. Inc. DCI were indicated up in premarket trading Wednesday, after the filtration products company reported fiscal third-quarter profit and record sales that beat expectations, and raised its full-year outlook.
• Online art seller Etsy ETSY says it’s buying London-based privately held fashion marketplace Depop for $1.625 billion. 

How are other assets faring?

• The yield on the 10-year Treasury note TMUBMUSD10Y, edged down to 1.607%. Yields and bond prices move in opposite directions.
• The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.3%.
• Oil futures CL00 looked set to extend its recent rally to the highest level in more than two years as OPEC+ kept its output plans in place. West Texas Intermediate crude for July delivery was rising 72 cents, or 1.1%, to trade at $68.44 a barrel. Gold futures GC00 saw a gain of 0.2% with contracts for August delivery
  GCQ21,
  +0.18%
  trading at $1,906.40 an ounce.
• In Europe, the pan-Continental Stoxx Europe 600 index SXXP rose 0.1% to add to its record climb, while London’s FTSE 100 UKX gained less than 0.1%.
• In Asia, the Shanghai Composite SHCOMP lost 0.8%, while Hong Kong’s Hang Seng Index HSI declined 0.6% and Japan’s Nikkei 225 NIK rose 0.5%.