U.S. stock futures rose ahead of the open on Wednesday as Wall Street counted down to key inflation readings and big bank earnings later this week.
Futures tied to the S&P 500 (^GSPC) rose 0.3%, while futures on the Dow Jones Industrial Average (^DJI) added 60 points, or 0.2%. Contracts on the tech-heavy Nasdaq Composite ( ^IKSIC ) also advanced about 0.3%.
US Treasury yields pared gains from the previous session, with the benchmark 10-year note falling below 3.6%. The US dollar index also retreated.
Wells Fargo ( VFC ) was among the companies on alert in early trade after the megabank said late Tuesday that it would scale back its home loan business. The move by Wells Fargo, once a leading mortgage lender, comes amid a slowdown in the housing market as high interest rates hamper home purchases and refinancing deals. The share price was little changed.
Shares of Party City ( PRTI ) rose nearly 27% premarket after jumping 118% on Tuesday after Bloomberg News reported that the company was seeking funds for a potential Chapter 11 bankruptcy, according to people familiar with the filing.
Embattled retailer Bed Bath & Beyond ( BBBI ) also rallied again in the week after it announced the company was considering bankruptcy due to financial problems. Shares of the meme jumped 25% premarket after rising more than 50% over the previous two sessions.
Shares of Coinbase ( COIN ) fell 4% premarket after Bank of America cut its rating from Neutral to Underperform after the company said Tuesday it will cut nearly 1,000 jobs as part of a restructuring plan.
The drums are getting louder for December’s Consumer Price Index (CPI) on Thursday morning. Economists expect headline CPI to have risen 6.5% from a year earlier last month, according to a consensus Bloomberg estimate. If realized, the reading would mark another decrease from the 7.1% increase recorded in November.
The report is likely to influence whether the Federal Reserve raises interest rates by 0.25% or 0.50% at the end of its next meeting on February 1, while offering hints about how much higher rates are likely to go at subsequent meetings.
The latest economic forecasts from the Fed’s December meeting showed officials projecting their key overnight lending rate to rise to 5.1% in 2023.
Several Federal Reserve officials, including San Francisco Fed President Mary Daley and Atlanta Federal Reserve President Rafael Bostick, said this week that rates are likely to go somewhere above 5%. And (JPM) CEO Jamie Dimon predicted in an interview with Fox Business Network that aired Tuesday that rates could reach 6%.
However, DataTrek’s Nicholas Collas points to a “significantly dovish” tilt in expectations for federal funds futures since the start of 2023. According to the CME FedWatch Tool, the odds of rates 4.75% higher fell by a total of 13.7 percentage points.
“Markets are completely and flatly ignoring the Fed’s rate guidance, less than a month after announcing it,” Collas wrote in a note. “Instead, futures — and therefore the stock market — expect the Fed to set year-end rates in the range of 25 to 50 basis points from where they are today.”
Aleksandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alekandraandnic
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