Stock futures trade mixed after touching record highs


Stock futures pointed to a mixed open Thursday morning following another record-setting session on Wall Street, after the Federal Reserve signaled it would retain its dovish monetary policy tilt as the economy emerges from the coronavirus pandemic.

Contracts on the S&P 500 fell by about 0.4%, while those on the Nasdaq dropped 1%. The Dow pointed to a slightly higher open, holding above 33,000. A day earlier, both the S&P 500 and Dow jumped to record closing highs. Treasury yields extended recent gains, and the benchmark 10-year yield added another nearly 10 basis points to a more than one-year high of 1.74%.

The quick moves higher in equities Wednesday afternoon came after the Federal Reserve telegraphed that rates would remain at their current near-zero levels through at least 2023, even as Federal Open Market Committee members upgraded their forecasts for economic growth and inflation over the next several years. Federal Reserve Chair Jerome Powell reiterated that the central bank would tolerate some overshooting of its inflation and employment targets as the economy makes strides in recovering, and would keep monetary policy loose until more data confirms the economy is back on track.

These comments helped to assuage a market that had grown increasingly nervous over a near-term tightening of monetary policy. Economic data has largely topped expectations, nearly $2 trillion in additional fiscal stimulus has been injected into the economy and the COVID-19 vaccine roll-out has accelerated in recent days, with more than 20% of the U.S. population receiving at least one dose to date. All of these factors have raised the specter that economic growth might overshoot even economists’ recently raised targets and lead to a quick rise in inflation, warranting a faster pivot from central bankers.

But the Fed “left all of its policy levers on a maximally accommodative setting. This occurred even as it acknowledged both better incoming data and an improved growth outlook,” JPMorgan economist Michael Feroli said in a note Wednesday. “Of note, while seven Committee participants now look for a hike by the end of ’23—up from five in December—that wasn’t enough to move the closely-watched median forecast, which still looks for unchanged policy rates for the next three years.

“With policy rates on hold for a long time, tapering will be the next important development for monetary policy, though the Committee and Chair Powell gave no indication of when that will happen or what the ‘substantial further progress’ criteria means in more detail,” he added, referring to the Federal Reserve’s crisis era, $120 billion per-month asset purchase program.

7:20 a.m. ET Thursday: Stock futures trade mixed, Nasdaq futures drop 

Here’s where markets were trading as of 7:21 a.m. ET Thursday morning: 

  • S&P 500 futures (ES=F): 3,955.5, down 18.5 points or 0.47%

  • Dow futures (YM=F): 33,054.00, up 37 points or 0.11%

  • Nasdaq futures (NQ=F): 13,041.5, down 160 points or 1.21%

  • Crude (CL=F): +$0.02 (+0.03%) to $64.62 a barrel

  • Gold (GC=F): +$6.20 (+0.36%) to $1,733.30 per ounce

  • 10-year Treasury (^TNX): +9.7 bps to yield 1.737%

6:02 p.m. ET Wednesday: Stock futures roughly flat

Here were the main moves in markets as of 6:02 p.m. ET:

  • S&P 500 futures (ES=F): 3,977.5, up 3.5 points or 0.09%

  • Dow futures (YM=F): 33,048.00, up 31 points or 0.09%

  • Nasdaq futures (NQ=F): 13,214.00, up 12.5 points or 0.09%

NEW YORK, NEW YORK - MARCH 09: The New York Stock Exchange (NYSE) stands in lower Manhattan on March 09, 2021 in New York City. The Dow Jones Industrial Average rallied more than 300 points Tuesday as tech stocks surged and optimism over the recently passed Covid relief bill cheered investors. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MARCH 09: The New York Stock Exchange (NYSE) stands in lower Manhattan on March 09, 2021 in New York City. The Dow Jones Industrial Average rallied more than 300 points Tuesday as tech stocks surged and optimism over the recently passed Covid relief bill cheered investors. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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