tl;dr
Stock index futures rose on Wednesday, while yields ticked lower, a day after Federal Reserve chair Jerome Powell said recent data showed little progress on inflation. S&P 500 futures (SPX) 0.4%, Nasdaq 100 futures (NDX:IND) 0.3%, and Dow futures (INDU) 0.5%. The 10-year Treasury yield (US10Y) fe...
Stock index futures rose on Wednesday, while yields ticked lower, a day after Federal Reserve chair Jerome Powell said recent data showed little progress on inflation. S&P 500 futures (SPX) 0.4%, Nasdaq 100 futures (NDX:IND) 0.3%, and Dow futures (INDU) 0.5%. The 10-year Treasury yield (US10Y) fell 3 basis points to 4.64%. The 2-year yield (US2Y) fell 4 basis points to 4.96%. "Markets have stabilized a bit this morning after losing further ground yesterday, as investors continued to be increasingly skeptical about the chance of rate cuts, especially in the U.S.," said Deutsche Bank's Jim Reid. "But risk appetite was also dampened by ongoing fears about a military escalation in the Middle East," Reid added. Powell's speech further put a dent in hopes for a rate cut in June, after he said recent data hasn't given them confidence that inflation is heading toward the target. "Powell has never articulated a medium-term policy framework beyond 'data dependency.' Keeping interest rates higher for longer will do nothing to reduce owners’ equivalent rent (it might increase it)," said UBS' Paul Donovan. There is a risk that Powell might be more concerned with political presentation than good economics, Donovan added. "Everything will change if payroll growth softens markedly in the next two reports, and the inflation data improve, as we expect. But the bar for a June easing is now higher than before," said Pantheon Macroeconomics. The Fed's Beige Book report on regional economic activity arrives this afternoon. Also on the economic front, the Atlanta Fed Business Inflation Expectations report is slated to come during market hours. The MBA Mortgage Applications data is scheduled to come before the bell.
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