Stock futures opened little changed Wednesday evening after another mixed session on Wall Street.
The Dow ended the regular session at a fresh record closing high, as cyclical stocks including energy and consumer discretionary names extended their recent run of outperformance as hopes for a strong economic recovery lingered. Tech shares lagged, and the Nasdaq fell 0.6% for its worst session so far in February. And while Treasury yields retreated on Wednesday, the benchmark 10-year yield hovered just slightly below the one-year high of about 1.31% it reached after a rapid run-up earlier this week.
An increasing number of economic and earnings data have pointed to a strong recovery coming out of the pandemic, even with the national vaccination program still under way. Retail sales surged by the most in seven months in January, handily exceeding expectations as government stimulus lifted consumer spending at the start of the year. And on the monetary policy side, the Federal Reserve’s latest meeting minutes suggested the central bank would maintain its aggressive asset purchase program and low interest rate policies to support the economy coming out of the pandemic.
“What has happened is that these cyclical rotations continue to be supported by, obviously the stimulus program that put the consumer at the front end of what may come down the road,” Omar Aguilar, Charles Schwab investment manager, told Yahoo Finance. “And therefore it’s not surprising that you actually see higher yields in Treasuries, and you actually see risky assets being in high demand.”
Though stocks reacted mutedly to the latest set of positive headlines including the retail sales report, the flurry of better-than-expected data has helped keep a floor under risk assets, some strategists noted.
“We’ve seen a two steps forward, one step back approach. Which means that the market trends higher and higher, we see a pause, we see a very brief pullback, and then the market takes a leg up again. I think we’re going to continue to see that, because there’s some positive news and positive headlines that we’re either sitting on or are in the midst of right now,” Jonathan Corpina, Meridian Equity Partners senior managing partner, told Yahoo Finance. “We’re talking about vaccination program roll-out – we’re seeing that each day, it’s getting much more successful. You see the retail numbers like today, that ties into stimulus. Stimulus money is going in the right direction. Earnings expectations have been tepid so far, and I think that’s widely accepted by markets, and that’s viewed as good news.”
On Thursday, companies including Walmart (WMT), Marriott (MAR), Planet Fitness (PLNT) and Roku (ROKU) are poised to report quarterly results, rounding out what has so far been a steady stream of better-than-expected fourth-quarter reports despite the ongoing pandemic.
Elsewhere, the House Financial Services Committee is set to hold a hearing at noon eastern on Thursday over recent market volatility involving GameStop and other heavily shorted stocks. Individuals including Vlad Tenev, CEO of the popular online brokerage firm Robinhood, as well as Citadel CEO Kenneth Griffin and Reddit co-founder Steve Huffman are poised to testify in the hearing.
6:05 p.m. ET Wednesday: Stock futures trade flat
Here’s where markets were trading Wednesday evening as the overnight session kicked off:
S&P 500 futures (ES=F): 3,927.25, down 0.75 points or 0.02%
Dow futures (YM=F): 31,556.00, up 7 points or 0.02%
Nasdaq futures (NQ=F): 13,701.5, up 1.75 points or 0.01%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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