Technology stocks were poised to win as investors welcomed profits from Meta Platforms and expected results from Apple and Amazon. AMZN -0.88% pcs.
Shares of the owner of Facebook FB -3.32% rose 14% in pre-market trading on Thursday, after the company said it added more users than investors expected in the first quarter. This gain helped send the Nasdaq-100 futures up 1.4%, pointing to a wider rise in technology stocks.
Futures for the S&P 500 rose 1.1% and contracts with the Dow Jones Industrial Average added 0.6%. In the bond market, the yield on 10-year treasury bills rose to 2.881% from 2.817%. Bond yields and prices are moving in opposite directions.
Shares of Twitter added 1% after social media company posted higher earnings and withdrew financial guidelines before it was acquired by Elon Musk. Southwest Airlines rose 3.4 percent due to forecasts that the airline will make a profit by the end of the year.
Caterpillar shares fell 2% before the market after the industry leader said margins fell in the first quarter. McDonald’s said profits were higher than analysts had expected, up 1.4 percent. Carlyle Group added 2.4% after assets under the management of the investment intermediary increased compared to the previous quarter.
On the economic front, data show that the US economy contracted at a 1.4% annual rate in the first quarter, its first contraction since the pandemic.
The sharp rise in stock futures highlighted the uncertainty faced by investors when the Federal Reserve undertook a series of interest rate hikes to quell inflation. Thursday’s rally contrasted with the decline in technology stocks after Netflix’s gains disappointed investors earlier in April. With little visibility into how higher interest rates will filter into the wider economy, money managers say trade has been weak and prone to shock movements in both directions.
“I don’t think people have much conviction at all,” said John Rowe, head of multi-asset funds at Legal & General Investment Management. “This is a period of time when fundamental uncertainty is at a particularly high level.”
Stock market volatility has not been maintained at such a high level since the 2008 financial crisis, except for the onset of the pandemic, Mr Rowe said. Bond volatility is the highest since the financial crisis, he added.
Investors will see how inflation for decades – and the Fed’s response – has affected consumer sentiment as Apple and Amazon present quarterly results after the closing bell.
Overseas markets have risen. Stoxx Europe 600 rose 0.7%, driven by stocks of car companies, technology companies and banks.
Standard Chartered jumped 15% after the UK-registered lender said profits rose in the first quarter. Volvo Car said revenue had risen, with shares in the Swedish carmaker up 9.7%.
Traders worked on the floor of the New York Stock Exchange on Wednesday.
Photo: Justin Lane / Shutterstock
Chinese markets have regained their foothold after collapses over fears that blocking big cities will slow the growth of the world’s second-largest economy. The Shanghai Composite Index rose 0.6%. Hong Kong’s Hang Seng rose 1.7%.
The Nikkei 225 rose 1.8 percent after the Bank of Japan stepped up its commitment to low interest rates despite rising inflation. The central bank said it would buy 10-year Japanese government bonds with 0.25% yields every business day to ensure that yields did not exceed that level.
The commitment to easy monetary policy contrasted with the Fed’s position and sent the yen lower against the dollar. The Japanese currency fell to about 130.65 yen per dollar, the lowest level since 2002. The offshore yuan weakened by about 0.9%, buying one dollar at about 6.64 yuan.
The WSJ index rose 0.9% to 96.05, its highest level since March 2020, when the early spread of Covid-19 caused stress in world markets.
As for raw materials, European natural gas markets have calmed after prices rose when Russia cut off supplies to two EU members on Wednesday. Gas futures fell 7.7% to 99.15 euros, or $ 103.96 per megawatt-hour.
Brent crude oil futures fell 0.6 percent to $ 104.33 a barrel.
Write to Joe Wallace at joe.wallace@wsj.com and to Quentin Web at quentin.webb@wsj.com
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