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Fed Chair Powell will speak at an ECB forum Wednesday.
Kevin Dietsch/Getty Images
The stock market was rebounding from a selloff Tuesday driven by higher bond yields and a suite of fears covering central bank stimulus, the U.S. debt ceiling, and a global energy crunch, as investors appeared ready to shake off those concerns Wednesday.
Futures for the
Dow Jones Industrial Average
indicated an open 220 points higher after the index fell 569 points to close at 34,299 Tuesday. Futures for the
S&P 500
and
Nasdaq
pointed to a similarly strong open after the indexes tumbled 2% and 2.8% Tuesday, respectively.
Overseas, Asian stocks followed the weakness on Wall Street to head lower, with the
Shanghai Composite
down 1.8%. China’s energy crunch, and the prospect that it will significantly dent industrial production, weighed heavily on Asian investor sentiment. In Europe, stocks bounced back, paving the way for a higher open in the U.S., with the pan-European
Stoxx 600
1% higher.
Concerns around the U.S. debt ceiling, the end of central bank stimulus and inflation have helped push bond yields higher, weighing on stocks—and especially technology companies, which make up much of the Nasdaq. While the macro concerns remained Wednesday, investor sentiment appeared ready to shake off fears.
“Equity markets fell and bond yields rose yesterday. The world’s media have rushed to offer a smorgasbord of causes—quantitative policy, the U.S. debt ceiling, whether or not to reappoint Fed Chair Powell, inflation concerns, Chinese property, etc.,” said Paul Donovan, the chief economist at UBS Global Wealth Management.
“There were no dramatic changes in economic fundamentals yesterday, and it seems unfair to blame economists and the economy for the inevitable market volatility. The process of economic normalization continues, however markets want to move about.”
In the day ahead, investors will be able to digest the pending home sales index for August and U.S. Federal Reserve Chair Jerome Powell’s speech at a European Central Bank forum.
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