Stock Futures Waver After Closing Records for S&P500, Nasdaq

25 Aug 2021 · 3rd Party Analysis

Stock Futures Waver After Closing Records for S&P500, Nasdaq

WRITTEN BY ThorFX

In Summary

  • Equity futures gravitate toward unchanged levels on Wednesday
  • Market participants keep their focus on the upcoming Fed event

US stock index futures swung between losses and gains in pre-market trading on Wednesday. Futures on the Dow Jones Industrial Average gyrated right around the flat line, along with futures on the S&P500. Nasdaq futures were slightly higher ahead of the opening bell in New York on Wednesday.

The calm overnight environment for the major stock averages arrived after a successful regular session quietly pushed the S&P500 and the Nasdaq Composite to new records. The broader S&P500 advanced 0.15% on Tuesday for its fourth consecutive winning session. The benchmark notched both an intraday all-time high and a record close, its 50th for the year.

Investors felt largely comfortable betting on stocks despite their all-time high valuation levels. Several factors contributed to the extended move to the upside on Tuesday. The full approval for the Pfizer Covid-19 vaccine by US regulators dispersed Delta variant fears as more people are now expected to get vaccinated and return to work and social life.

Moreover, the House of Representatives on Tuesday passed a budgetary framework for a $3.5tn spending package directed toward social priorities such as education, child care, and green energy.

While the budget will be further amended, the House is expected to vote on the $1tn infrastructure package in late September. The bill on infrastructure passed the Senate with Republican support earlier this month. The achievement marked President Biden’s biggest bipartisan victory.

The much-anticipated event for this week, the Jackson Hole symposium hosted by the Federal Reserve, is set to begin tomorrow. Central bankers are gathering in Wyoming to discuss the state of the economy, the outlook for growth, and the challenges that lay ahead.

Major Digital Assets Slip on Tuesday

Market participants largely expect Fed policymakers will reveal some insights over a potential start of tapering, or reducing, asset purchases this year. The US central bank has been purchasing at least $120bn of bonds per month since March last year in efforts to sustain the stability and progress of the US economy in the face of the coronavirus pandemic.

Fed Chairman Jerome Powell will appear on Friday to make his remarks as part of the summit which this year will be held online.

As US investors are waiting to enter the regular trading session, European markets already kicked off with minor gains on Wednesday. The Stoxx Europe 600 posted a modest move up at the open, while major European bourses struggled for direction and traded mostly sideways.

Markets across Europe ended flat on Tuesday as investors were more on the defense side ahead of Fed’s updates on its approach to the US economy.

In cryptocurrency, major digital assets slipped on Tuesday. Bitcoin retreated from its weekly highs above $50,000 as buying momentum faded. The broader market decline pressured the Ethereum token which

ended the day lower by roughly 4%. The slide in cryptocurrency prices is on pace to extend to today’s market session as bitcoin and other major tokens turned slightly lower in afternoon trading Wednesday.

In other markets, gold is trading relatively unchanged, hovering near $1,800 per troy ounce as the US dollar is sliding across the currency board.

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