Tech stocks set to pull away from pack at US open as investors await big-name earnings and Fed decision
- US tech stocks were set to open higher, while S&P and Dow futures dipped.
- Microsoft's strong earnings lifted
Nasdaqfutures as investors awaited the Fed's policy decision.
- The battle over
GameStopbetween Redditors and short sellers continued to rage.
US tech stocks were set to open higher on Wednesday, as investors cheered
Futures for the Nasdaq 100 index - which is loaded up with big tech names - rose 0.48% on Wednesday. S&P 500 and Dow Jones futures slipped 0.16% and 0.31% respectively, however, as investors took a breather after recent record highs. The
Emblematic of this trend is the more than 600% rise in video-game retailer GameStop's share price over the last month, driven largely by the Reddit group Wallstreetbets. GameStop was up more than 100% in pre-market trading.The record rise has hit short sellers hard and divided opinions sharply. On Wednesday, "Big Short" investor Michael Burry, who took a bullish view of GameStop in 2019, tweeted the price moves are "unnatural" and "insane". In the more traditional parts of the market, investors' focus on Wednesday will turn to big-name earnings and the Fed.
Microsoft's shares were 3.64% higher in pre-market trading after it posted a 17% rise in sales in the latest quarter. The rise helped lift Nasdaq futures. Apple, Facebook and Tesla are all due to report earnings later on Tuesday.
Milan Cutkovic, market analyst at trading platform Axi, said: "Microsoft reported strong figures as the pandemic continues to boost its cloud computing business.""Apple and Facebook, both of which will publish their latest numbers today, are likely to beat expectations too and add fresh fuel to the tech rally."
The Federal Reserve is expected to keep monetary policy on hold later on Wednesday and chairman Jay Powell will address reporters. Michael Gapen of Barclays said in a note: "The main information will come from the press conference."
He added: "There, we expect Chair Powell to emphasize that the economy has a long way to go to recover fully and it remains premature to talk about [bond-buying] exit strategies."The dollar rose as investors shied away from the S&P 500 and Dow Jones indices. The dollar index was 0.23% higher on Wednesday morning at 90.37.
Read More: Biden's infrastructure plans could be worth $10 trillion to companies, a ClearBridge fund manager told us. Here are 4 stock-market themes investors can play to take advantage of the once-in-a-lifetime conditions.Bitcoin - struggling for attention as a swarm of day-traders focused on GameStop - was down 2.8% to $31,385.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "We see reasons equities should continue to rise despite the recent concerns and so, continue to hold a positive outlook on stocks and see cyclically sensitive markets leading the way as the global recovery broadens."
Oil prices rose on Wednesday morning as traders anticipated higher demand. The global benchmark Brent crude price was up 0.74% to $56.05 per barrel. The US benchmark WTI price was 0.7% higher at $52.98 a barrel.
- 1.28 lakh people over 60 years get 1st dose of COVID vaccine on first day
- Chinese hackers target Indian vaccine makers SII and Bharat Biotech: Report
- GST revenue up 7% year-on-year in February to over ₹1.13 lakh crore
- Here is the list of common side-effects of COVID-19, so that you don't panic if you get these
- These are the top 10 likely IPOs scheduled in March 2021