U.S. stock indexes were headed toward all-time highs early Wednesday, ahead of an account of the rate-setting Federal Open Market Committee’s mid-June gathering, which could provide further insights to markets that have been anxious about the economic recovery from COVID.
An report on U.S. job openings due at 10 a.m. Eastern Time also will be closely followed.
What are major indexes doing?
-
The Dow Jones Industrial Average
DJIA,
-0.34%
rose 96 points, or 0.3%, to 34,675. -
The S&P 500
SPX,
-0.22%
gain 13 points, or 0.3%, at 4,356, touching an intraday record high at 4,357.25. -
The Nasdaq Composite Index
COMP,
-0.40%
advanced 63 points, or 0.4%, to 14,727, establishing a fresh intraday record early in the session at 14,755.33.
On Tuesday, the Dow fell 208.98 points, or 0.6%, to close at 34,577.37. The S&P 500 ended the day down 0.2%, snapping a string of seven consecutive record closes — the longest such run since an eight-day streak ended in 1997. The Nasdaq Composite edged up 0.2% for its 21st record finish of 2021.
What’s driving the market?
A big feature of Wednesday’s trading was an extension of a slump in longer-dated bond yields, which comes ahead of the publication of minutes of the Fed’s last policy meeting due at 2 p.m. Eastern.
At its June 15-16th meeting, policy makers moved up their forecasts for a policy interest rate increase and began talking about when it would be appropriate to discuss the unwinding of its asset purchases of $120 billion a month, which should be a drag on Treasury rates.
The decline in Treasury yields, with the 10-year Treasury note
TMUBMUSD10Y,
1.298%
falling to the lowest since February at a rate below 1.3%, also has emboldened buyers in yield-sensitive segments of the market, like the technology-heavy Nasdaq Composite and growth stocks.
Bank shares, meanwhile, including Goldman Sachs
GS,
-1.85%
and JPMorgan Chase
JPM,
-0.80%
retreated amid the rate retreat, potentially hurting the financial sector’s profitability.
Investors have heard from virtually every Fed official since the meeting, leaving the market with a good sense of where the central bank stands, the analyst said. The Fed has signaled it want sto see a few more good monthly employment reports “before getting the ball rolling, likely by sending a strong tapering warning in August.”
“This was the meeting when the Fed shocked markets by signaling it might take its foot off the accelerator soon, so traders will be looking for clues as to what kind of progress the committee wants to see before taking the next normalization step,” said Marios Hadjikyriacos, investment analyst at XM, in a note.
Read: June jobs report bolsters case for Fed to start slowing down bond-buys this year
The drop in yields also comes as oil prices
CL.1,
-2.93%
were up in the wake of a disagreement within the Organization of the Petroleum Exporting Countries and their allies — a group known as OPEC+ — on raising output. WTI crude touched a six-year high briefly on Tuesday before retreating. However, crude oil price recovered about 2% early Wednesday.
See:What the OPEC standoff means for oil prices and financial markets
Falling U.S. Treasury yields were seen underpinning technology stocks and helping to lift the Nasdaq. However, investors are wary of Chinese technology companies listed on U.S. markets as Beijing tightens its control over the country’s largest tech companies. Didi Global Inc.
DIDI,
-6.00%
was down more than 4% early Wednesday, after tumbling 19.6% on Tuesday in the wake of last week’s New York IPO.
Data on U.S. May job openings are due at 10 a.m. Eastern.
Which companies are in focus?
-
Planet Labs Inc. is set to go public through a merger agreement with special-purpose acquisition company, or SPAC, dMY Technology Group Inc. IV
DMYQ.UT,
+2.53%
in a deal that values Planet at about $2.8 billion. - Shares of Coinbase Global Inc. COIN rose 1.8% in premarket trading Wednesday, after Oppenheimer analyst Owen Lau said he was a little more bullish on the cryptocurrency trading platform, citing expectations of strong second-quarter results.
- Chobani announced Wednesday that it has filed a confidential draft registration statement for a proposed initial public offering with the Securities and Exchange Commission.
- Shares of Moderna Inc. MRNA were down in premarket trading on Wednesday after the company said it began dosing patients in a Phase 1/2 clinical trial evaluating an experimental seasonal flu vaccine.
- Shares of Biohaven Pharmaceutical Holding Co. Ltd. BHVN were up 12.1% in premarket trading on Wednesday after the company said its new migraine treatment brought in $93 million in sales in the second quarter of 2021.
How are other assets trading
- The ICE U.S. Dollar Index DXY, +0.07%, a measure of the currency against a basket of six major rivals, rose 0.3%.
- The U.S. oil benchmark CL00 traded higher, up 0.2% at $73.43 a barrel on the New York Mercantile Exchange Gold futures GC00 rose 0.6% to $1,805.90 an ounce.
- European equities traded higher, with London’s FTSE 100 UKX up 0.6% and the Stoxx Europe 600 index SXXP gaining 0.8%.
- In Asia, the Shanghai Composite SHCOMP rose 0.7%, while Hong Kong’s Hang Seng Index HSI fell 0.4% and Japan’s Nikkei 225 NIK lost 1% on the session.
