U.S. Stock Futures Rise in Holiday-Shortened Trading Week Amid Fed, Trump Focus
U.S. stock futures advanced on Tuesday, kicking off a holiday-shortened trading week with the Federal Reserve and President Donald Trump's potential policy moves taking center stage.
Nasdaq 100 Futures Surge
Nasdaq 100 futures (NQ=F) jumped over 0.4% following Friday's surge for the tech-heavy index. S&P 500 futures (ES=F) gained approximately 0.3%, poised for a fresh attempt at the January all-time high, while Dow Jones Industrial Average futures (YM=F) ticked up 0.2%.
Wall Street Cautiously Upbeat
Stocks on Wall Street maintained a cautious optimism after Monday's closure for Presidents Day, as investors weigh the future path of interest rates. Fed officials over the weekend signaled a firm stance on maintaining current levels to combat inflation. Treasury yields moved higher as investors seek insights into the likelihood of rate cuts this year, given recent unclear data. The benchmark 10-year yield (^TNX) rose to around 4.52%, shedding its lowest closing level in a week.
Fed Minutes, Ukraine Talks in Focus
Uncertainty over the direction of interest rates will shift the focus to Wednesday's release of minutes from the Fed's January meeting, which could provide clues to policymakers' thinking amid Trump's tariffs. Concurrently, the US-Russia talks aimed at ending the Ukraine war are gripping markets, as teams from both sides meet in Saudi Arabia.
Europe Stocks Hold Near Record Highs
European stock markets (^STOXX) remained close to record highs, driven by expectations of increased defense spending in the region. Earnings season continues, with results from 46 S&P 500 companies expected this week. Baidu (BIDU, 9888.HK) reported a lower-than-expected revenue decline, easing concerns over AI rivalry, but its shares slipped in premarket trading.
Fed Officials Emphasize Patience
Fed speakers reiterated their stance on holding off on rate cuts in light of persistent inflation, though there were glimmers of hope. Philadelphia Fed President Patrick Harker highlighted patience as policymakers wait for price pressures to subside. Michelle Bowman opposed any easing until a clearer picture of Trump's tariffs emerges. Christopher Waller suggested that the tariffs may have a modest impact on inflation, allowing the Fed to focus on other factors when setting rates.
BofA Survey Highlights Trade War Risk
Bank of America's latest fund manager survey shows that a global trade war is perceived as the biggest risk to markets by 42% of respondents, up from 30% in January.
Earnings Calendar
Devon Energy (DVN), Oxy (OXY), and Toll Brothers (TOL) will release quarterly results on Tuesday, while Walmart (WMT) and Dropbox (DBX) will announce earnings on Thursday.