S&P 500 Futures Shake Off Bonds Disconnect with Impressive Rally

Stock futures in the U.S. saw a rise on Wednesday, following a challenging day for stocks despite the added assistance from bond yields.

What’s happening

• The value of the futures for the Dow Jones Industrial Average, known as YM00, rose by 19 points or 0.1% to reach a total of 36208.
• The value of ES00, or the S&P 500 futures, went up by 10 points or 0.2% to reach 4585.
• The Nasdaq 100 futures contract, known as NQ00, increased by 55 points or 0.3%, reaching a total value of 15964.

On Tuesday, there were fluctuations in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite. Specifically, the DJIA declined by 80 points (0.22%) to reach 36125, the SPX saw a decrease of 3 points (0.06%) to reach 4567, and the COMP showed an increase of 44 points (0.31%) to reach 14230.

The drop in the S&P index conceals a stronger showing from a notable group of major technology companies, referred to as the Magnificent Seven, which features Apple. Apple’s stocks experienced a rise of 2%.

What’s driving markets

Additional jobs data will be provided on Wednesday with the ADP private-sector employment report. It is important to mention that this report cannot be considered a reliable indicator of the government’s jobs data, which will be made public on Friday.

On Tuesday, the yield on the 10-year Treasury note, represented by BX:TMUBMUSD10Y, decreased by 11.5 basis points to 4.18%. This drop was caused by the release of data showing a decrease in job openings, reaching a level not seen in 28 months. The 10-year yield, which is seen as a benchmark, has now declined in 10 out of the last 13 trading days. It’s worth mentioning that yields and prices move in opposite directions.

The statements made by JPMorgan Chase’s CEO Jamie Dimon during his testimony in front of the Senate Banking Committee will also be closely monitored by the markets. Dimon highlighted in his prepared comments that if the suggested regulations on increasing capital are implemented, mortgages will become pricier, saving for retirement will become more difficult, and consumer prices will rise.

Brian Moynihan, CEO of Bank of America, has shared his worries at a Goldman Sachs conference regarding the Federal Reserve’s approach to the economy. He urged the central bank to exercise caution and avoid excessive tightening. While Moynihan acknowledged that interest rates would stay high, he emphasized the importance of maintaining a balance that doesn’t overly stifle inflation.