US Futures Rise with Megacap Support; Eyes on Earnings and Fed

Wednesday kicked off with a surge in U.S. stock index futures, propelled by the robust performance of megacap growth stocks. Investors were captivated by a flurry of corporate earnings reports and insights from Federal Reserve policymakers, eagerly seeking clues about the health of the economy.

Before the opening bell, megacap giants like Microsoft, Amazon.com, and Tesla showed gains ranging from 0.5% to 1.1%, setting a positive tone for the day.

However, the benchmark S&P 500 and Nasdaq closed lower in the previous session, weighed down by rising Treasury yields. Although government bond yields eased slightly, the 10-year note held steady at 4.6469%.

Investor attention turned to Federal Reserve Board Governor Michelle Bowman and Cleveland Fed President Loretta Mester, scheduled to speak later in the day, adding to the market’s intrigue.

Top officials of the U.S. central bank, including Fed Chair Jerome Powell, refrained from providing explicit guidance on interest rate cuts. Their remarks on Tuesday emphasized the need for continued restrictive monetary policy, tempering hopes for significant reductions in borrowing costs this year.

According to the CME FedWatch tool, market participants estimated a 43% chance that the central bank could begin its easing cycle in July.

Later in the day, investors eagerly awaited the release of the Fed’s “Beige Book” report, providing insights into the state of the world’s largest economy.

As of 7:12 a.m. ET, Dow e-minis surged 135 points (0.35%), S&P 500 e-minis gained 21.25 points (0.42%), and Nasdaq 100 e-minis rose by 53 points (0.30%).

In the spotlight among stocks, United Airlines climbed 5.2% after forecasting stronger-than-expected earnings for the current quarter.

Other airline stocks like American Airlines, Delta Air Lines, and Southwest Airlines followed suit with gains ranging from 0.9% to 1.8%.

Mobileye advanced 3.1% following reports by Reuters that the Israeli automotive tech company was set to ship at least 46 million new assisted-driving chips.

However, JB Hunt Transport Services dipped 7.9% after the trucking firm fell short of Wall Street estimates for first-quarter results.

Similarly, apparel retailer Urban Outfitters saw a 5.3% decline after Jefferies downgraded its rating to “underperform” from “hold”.