Wall Street stock futures soared on Tuesday as expectations increased for the Federal Reserve to hike interest rates, but investors remained cautious as conflict intensified in the Middle East.Thank you for reading this post, don't forget to subscribe!
Dow Jones Industrial Average (^DJI) futures advanced approximately 0.2%, or around 60 points, while S&P 500 (^GSPC) futures climbed about 0.1%. Contracts on the tech-heavy Nasdaq 100 (^NDX) also rose about 0.1%, reversing the stock index’s losses after a higher close on Monday.
The surge followed dovish remarks from two Fed officials, suggesting that the recent surge in bond yields could bring about the tightening of lending conditions anticipated by the central bank. Some analysts argue that this could give policymakers a reason to delay raising rates in this cycle.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
However, the IMF cautioned that monetary policy would need to remain stringent in most regions as central banks are “well-prepared” to bring inflation closer to the target.
When trading reopened on Tuesday after the holidays, yields on Treasuries declined, alleviating some of the pressure on stocks. The yield on 10-year Treasury (^TNX) exceeded its 16-year peak. Investors also kept an eye on clashes between the Islamic militant group Hamas and Israel, which has pledged to keep the Gaza Strip under siege.
As another indication of reduced concerns, oil prices declined after surging more than 4% as investors monitored potential disruptions in supply due to the Middle East conflict.
Stock futures soar as expectations of Fed’s stance increase
Major stock indexes were set to open with gains on Tuesday as investors focused on dovish comments from Federal Reserve officials but also monitored developments in the Middle East conflict.
Futures on the Dow Jones Industrial Average (^DJI) advanced 0.17%, or 58 points, while S&P 500 (^GSPC) futures climbed 0.11%.Contracts on the tech-heavy Nasdaq 100 advanced 0.12%.
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