Money

Stock futures rise after S&P 500 marks another record close

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People visit the Charging Bull statue during the Covid-19 pandemic in New York.

Tayfun Coskun | Anadolu Agency | Getty Images

Futures contracts, which were pegged to major U.S. stock indices, soared at the start of the overnight session on Wednesday night, suggesting Wall Street may extend the gains that drove the S&P 500 to record highs this week.

Futures linked to the broad stock index rose about 0.25%, while Nasdaq 100 contracts gained a similar 0.3%. Dow futures rose 37 points.

The moves in extended trading made a fresh closing high after an SP 500 rose to 4,079.95 late in the day. The Dow Jones Industrial Average rose 16 points, or 0.1%, during the regular session.

The tech-heavy Nasdaq Composite fell 0.1% as big tech stocks outperformed. Amazon, Apple, and Alphabet all rose more than 1%, while Facebook gained 2.2%.

Both the Dow and S&P 500 records close on Monday.

Investors were reassured during Wednesday’s session by the Fed’s latest minutes, which show officials plan to keep the asset buying pace the same for some time as the central bank works to keep prices stable and maximize employment to support.

For Evercore ISI equity strategist Dennis DeBusschere, the market is not entirely convinced that robust economic growth and inflation will not force the hand of the central bank sooner.

“The market predicts the Fed will have to raise rates before saying so,” he said in an email. “The question is whether the Fed will raise rates before inflation has risen above 2% for some time.”

If they stick to their plan, yield curves will steepen as growth prospects improve and the unemployment rate falls, added DeBusschere. “It’s about RESULTS.”

Speaking from Washington on Wednesday, President Joe Biden spoke about his administration’s $ 2 trillion infrastructure plan, which includes an increase in the corporate tax rate to 28%, and said he was ready to negotiate the proposed tax hike.

The proposed corporate income tax hike is seen as the primary source of tax revenue for the White House infrastructure plan and is a non-starter for Republicans who say they are concerned about tax hikes if the U.S. economy emerges from the Covid-19 pandemic.

Separately, the Treasury Department said Biden’s tax proposals would generate approximately $ 2.5 trillion over 15 years to fund eight years of spending on roads, bridges, transit, broadband, and other projects.

Tax support is seen as the main driver behind last month’s share records and strong economic data, including a stronger-than-expected job report from March. The S&P 500, Dow Industrials, and Nasdaq Composite all have their fourth consecutive quarter of earnings as the economic recovery from Covid-19 accelerates.

On Thursday, investors will ponder the latest update from the Department of Labor on the number of Americans filing for unemployment benefits for the first time. Economists polled by Dow Jones expect 694,000 claims in the week to April 3 for the first time.

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Robert Dunfee