Dow futures rise as focus turns to Fed minutes and PPI data
Stock futures edge higher as Treasury yields decline
U.S. stock futures are seeing a slight increase on Wednesday, supported by a drop in Treasury yields. Investors are eagerly awaiting the release of the minutes from the Federal Reserve’s September meeting.
Recovery in stock market
By 07:00 ET (11:00 GMT), the Dow futures contract had gained 85 points, or 0.3%. The S&P 500 futures traded 12 points, or 0.3%, higher, while the Nasdaq climbed 55 points, or 0.4%.
Wall Street optimism
The main indices on Wall Street closed higher on Tuesday, buoyed by positive comments from Federal Reserve officials. The remarks have raised hopes that the central bank is getting closer to the end of its interest rate increases.
Fed minutes in focus
Investor sentiment has improved this week as U.S. government bond yields have eased. This is due to safe-haven bids prompted by the Middle East conflict, as well as dovish remarks from Federal Reserve officials.
On Tuesday, Atlanta Fed President Raphael Bostic suggested that there is no longer a need for the central bank to raise interest rates further this year. Now, all eyes are on the release of the minutes from the Fed’s September gathering, where the decision to keep borrowing costs steady was made.
Previously, the Fed had hinted at the possibility of another rate hike to address stubbornly high inflation. However, the recent change in tone has cast doubt on the likelihood of another increase. Investors are eager for guidance on the future direction of monetary policy.
September producer prices due
Alongside the Fed minutes, investors will also be paying attention to the September Producer Price Index (PPI) release. This report, followed by Thursday’s key Consumer Price Index (CPI) data, will provide insights into inflation trends in the U.S. economy.
Economists expect the PPI to rise by 1.6% for the year and 0.3% from August. Core PPI, which excludes volatile food and energy prices, is forecasted to increase by 2.3% for the year and 0.2% for the month.
Signs of moderating inflation will likely reinforce the recent dovish sentiment among Fed members, potentially shaping market expectations for the remainder of the year.
Exxon Mobil acquires Pioneer
In corporate news, Exxon Mobil Corp (NYSE:) has agreed to purchase rival Pioneer Natural Resources (NYSE:) in an all-stock deal worth nearly $60 billion. If completed, this would be the largest acquisition of the year.
Oil prices retreat
Oil prices have pulled back slightly on Wednesday. However, concerns remain about potential supply disruptions due to the ongoing turmoil in the Middle East.
Traders are keeping a close eye on U.S. weekly oil inventory data, which will be released a day later than usual due to the Columbus Day holiday.
At 07:00 ET, futures for West Texas Intermediate crude traded 0.5% lower at $85.55 a barrel, while Brent crude dropped 0.4% to $87.31.
Gold and currency update
Meanwhile, gold prices rose 0.7% to $1,887.95/oz, while the euro traded largely flat at 1.0602 against the U.S. dollar.
(Oliver Gray contributed to this article.)
