Dow, S&P 500, Nasdaq Set to Open Up; Trump, Iran, Israel Cease-Fire Eases Oil Fears; Nvidia, Tesla, Super Micro, More Movers
Stocks looked set to creep higher on Wednesday as investors bet that the truce in the Middle East will last and tried to figure out whether the Federal Reserve will cut interest rates in July or September.
Futures tracking the Dow Jones Industrial Average and contracts tied to the S&P 500 were broadly flat. Nasdaq 100 futures edged up less than 0.1%, a day after the tech-heavy gauge marked its first record close since February. Both the S&P 500 and the Dow are also within touching distance of their all-time highs.
President Donald Trump accused both Israel and Iran of violating their cease-fire Tuesday, but the market appears to believe the pact will hold. The de-escalation of tensions in the Middle East has eased concerns about disruption of energy supplies, sparking a sharp drop in oil prices. Crude was rebounding Wednesday–the Brent international benchmark climbed 1.8% to $67.33 a barrel, and West Texas Intermediate U.S. prices were up 1.8% to $65.52 a barrel.
Investors will also be keeping a close eye on Jerome Powell’s trip to Capitol Hill, with the Fed Chair set to appear before the Senate Banking Committee on Wednesday. Powell didn’t rule out a July interest-rate cut on Tuesday when fielding questions from lawmakers, but he appeared to signal that September is the most likely window for the central bank to start lowering borrowing costs.
“The key reason the market rallied so much was because lower oil prices (and hence lower inflation) are keeping the prospect of rate cuts in play this year,” Deutsche Bank macro strategist Jim Reid said in a research note, adding that there was “little sign of any rush” to lower in Powell’s testimony.
Yields on 10-year U.S. Treasury notes slipped about 1 basis point to 4.291% Wednesday. Gold ticked up 0.4% to $3,347 an ounce, and a gauge of the U.S. dollar against a weighted basket of other currencies climbed 0.2%.
