Stock futures increased little on Wednesday as quarter 2 came to an end. Futures of Dow Jones industrial increased by 70 points. S&P 500 futures increased by 0.2%. Nasdaq 100 increased by 0.3%.
Micron Technology saw a 2% increase in its shares during extended trading after reporting higher-than-expected revenue for its latest quarter. The chipmaker attributed the strong performance to increased industry demand.
JPMorgan and Bank of America also experienced gains of over 1% in after-hours trading following the news that the country’s biggest lenders had passed the Federal Reserve’s annual stress test.
The stock market is heading towards the end of the first half of 2023 with robust performance. The S&P 500 increased by 14% this year.
Nasdaq has increased nearly by 30%, on track for its best first half since 1983. The Dow, however, has underperformed with only a 2% increase this year.
Jason Draho, the head of asset allocation Americas at UBS Global Wealth Management, expressed the view that for equities to rise further, factors such as the Federal Reserve’s actions, economic data, and the progress of the artificial intelligence sector all need to align positively. He noted that the S&P 500 is already priced for a near-perfect outcome, and any setbacks could lead to a downturn.
Federal Reserve Chair Jerome Powell’s recent comments about the tightening cycle were digested by investors, leading to a relatively flat close for the S&P 500. Powell stated at a forum sponsored by the European Central Bank that more restrictive policies would be implemented by the Fed to combat inflation. This includes the possibility of consecutive interest rate hikes.
Powell’s upcoming remarks at a conference in Madrid, where he will be in discussion with Bank of Spain Governor Pablo Hernández de Cos, are being closely monitored by investors.
Thursday morning’s release of weekly jobless claims data will provide insights into the state of the labor market.
In June, the S&P 500 recorded a 4.7% increase, on pace for its best monthly performance since January. The equity benchmark has gained 6.5% in the second quarter, positioning it for its third consecutive positive quarter.
U.S. Treasury yields rose as investors considered the future of interest rates following Jerome Powell’s indications about monetary policy.
During his speech in Madrid, Powell addressed the collapse of Silicon Valley Bank and two other mid-sized American banks earlier in the year. He emphasized the need to strengthen supervision and regulation of institutions similar in size to SVB.
Powell stated that had the largest banks been undercapitalized or illiquid, managing the banking system stress during the spring would have been more challenging.
H&M shares surged 8.5% in early trading after the Swedish fashion retailer announced stronger-than-expected profits for the March to May period and positive sales for the third quarter.
In European markets, the pan-European Stoxx 600 index remained close to the flatline at market open.
Retail stocks gained 1.2%, while travel and leisure stocks declined by 0.5%. H&M’s positive performance led the index, while Spanish electric utility Endesa dropped 8%.
All 23 U.S. banks included in the Federal Reserve’s stress test successfully navigated a severe recession scenario while maintaining minimum capital levels and continuing to lend to consumers and corporations.
Despite projected losses of $541 billion for the group, the banks demonstrated resilience.
- Published By Team Nation Press News