The main indices on Wall Street got off to a positive start on Wednesday as stimulus optimism and reassuring US inflation data drove sentiment higher.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.77% at 32,078, while the S&P 500 climbed 0.79% to 3,905 and the Nasdaq rose 1.28% to 13,241.
The strong start followed data that showed US headline inflation rose to 1.7%, a 0.2% increase year-on-year and lower than analysts had predicted.
The softer figure may help alleviate anxieties among some investors in the bond market, where rising yields have held back equities in recent days.
Meanwhile, online video game platform Roblox Corp (NYSE:RBLX) will be hoping for a positive session as it begins trading on the public market today. The shares were provided a reference price of US$45 each on Tuesday evening, giving the company an expected market cap of around US$30bn.
7:50am: Wall Street to head higher
Wall Street futures are pointing at a green open as Joe Biden is expecting to finally see his US$1.9 trillion stimulus package passed through the House of Representatives later on Wednesday.
“While traders have been looking for this package as means to turbocharge the US economic recovery, there are plenty of questions over the impact it could have upon inflation,” commented Joshua Mahony, analyst at IG.
“Inflation expectations have already been soaring in the US, and the passing of this huge stimulus package adds further fuel to the fire. While Powell will try to soothe concerns that the Fed will need to tighten policy in the event of rising prices, the key questions is whether this package will accelerate the widespread expectations for a significant bounce in 2021 inflation levels.”
Four things to watch for on Wednesday:
- Notable earnings for Wednesday include computing firm Oracle Corp (NYSE:ORCL) and food firm Campbell Soup Co (NYSE:CPB)
- Shares in General Electric Co (NYSE:GE) will also be in focus after the conglomerate agreed to merge its aircraft leasing unit with its rival AerCap in a deal worth around US$30bn
- Pfizer Inc (NYSE:PFE) could also draw attention following news that the EU Commission said the company and its partner BioNTech will supply 4mln more doses of its coronavirus vaccine
- On the macro front, US inflation data will be the big news, while a monthly budget statement could also draw some eyes as the US House of Representatives prepares to vote on the stimulus package
Story by ProactiveInvestors
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