Futures Trading: Stock Futures Rise on Bullard Comments
FUTURES TRADING – US stock futures gained on Tuesday after St. Louis Federal Reserve President James Bullard said that an interest rate cut could be on the horizon in light of the recent trade war events and the slowing economic growth.
A rate cut “may be warranted soon,” pushing Fed fund futures to price in a 67% probability that the US central bank would lower short-term borrowing costs during its policy meeting on July 30 to 31.
This would offer some breather to Wall Street. The three major stock indexes in the US have lost at least 6% in May after a surprise re-ignition of trade tensions between the United States and China, as well as the former’s threat to slap tariffs on Mexican products.
“We are looking for circuit breakers to put an end to a slide in sentiment in the United States. A significant dovish move in central banks or a resolution in trade could be the big circuit breakers,” said a European economist.
Dow e-minis were 106 points higher, or 0.43 percent up. S&P 500 e-minis were10.75 points higher, or 0.39 percent up. NASDAQ e-minis were 25.5 points higher, or 0.36 percent up.
FAANG stocks Amazon.com, Apple Inc., Facebook Inc., and Google-parent Alphabet Inc. were slightly up in premarket trading after a weak day on fears of being targeted by US government antitrust regulators.
NASDAQ has shed 10.2 percent since its May 3 all-time high, confirming a correction has happened. Meanwhile, the S&P 500 is 7.6 percent lower than its May 1 record high.
In Europe, shares lost half a percentage point as tech stocks jittered over US antitrust actions against Google and other key tech companies.
Europe’s main STOXX 600 was -0.5 percent lower. The tech sector shed 2 percent.
Auto stocks, on the other hand, outperformed and rose about half a percent on better-than-expected sales from the US market.
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