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Dow futures rise more than 100 points; Fed speakers in the spotlight

February 26,2018 10:13

Dow futures rose Monday, putting the stock market on track to build on its two-week rally. Investors may be heartened by a Federal Reserve report that gave little hint that it's prepared to raise U.S. interest rates more aggressively this year. Traders ...and more »


Dow futures rose Monday, putting the stock market on track to build on its two-week rally.
Investors may be heartened by a Federal Reserve report that gave little hint that it’s prepared to raise U.S. interest rates more aggressively this year.
Traders will be watching for comments from two Fed officials due to speak Monday, in a week that will feature new Fed Chairman Jerome Powell’s comments in front of Congress.
What are the main benchmarks doing
Dow futures YMH8, +0.58% rose by 158 points, or 0.6%, to 25,472, while S&P 500 futures ESH8, +0.33% climbed 10.2 points, or 0.4%, to 2,759.25. Nasdaq-100 futures NQH8, +0.37% rose 19.5 points, or 0.3%, to 6,929.50.
On Friday, the Dow Jones Industrial Average  DJIA, +1.39% S&P 500 index SPX, +1.60% and Nasdaq Composite COMP, +1.77% all gained more than 1%, as each benchmark notched its second up week in a row.
What could drive markets?
Investors may be ready to resume Friday’s push higher, which came after the Fed’s semiannual monetary-policy report signaled an overall upbeat view on the U.S. economy, and discussed a pickup in inflation toward the end of 2017, but offered few fresh signals regarding more aggressive policy action.
More Fedspeak is on the way, with St. Louis Fed President James Bullard due to give a speech on the economy and monetary policy at the National Association of Business Economics in Washington at 8 a.m. Eastern Time. Fed Vice Chairman Randall Quarles will speak on the same topic at the National Association of Business Economics in Washington at 3:15 p.m. Eastern.
But the main attraction this week will likely be Fed Chairman Jerome Powell, who will head to Capitol Hill on Tuesday for the first of two bouts of questions with U.S. lawmakers. Investors want to know if the Fed is planning four interest-rate hikes for 2018 instead of three.
Read: Fed and new boss Jerome Powell are on inflation watch as anxious investors look on
Easing bond yields may also be giving stocks a lift. The yield on the 10-year Treasury note TMUBMUSD10Y, -0.51% continue to pull lower on Monday, last at 2.863% from 2.871% late Friday.
Read: Why a spike in the 10-year Treasury yield to 3% won’t be a death knell for stocks
The Chicago Fed national activity index for January is due at 8:30 a.m. Eastern Time, while new-home sales for January are due at 10 a.m. Eastern.
What are strategists saying?
“Higher inflation and interest rate expectations were blamed for the sharp selloff following some more hawkish commentary from central banks and stronger economic data,” said Craig Erlam, senior market analyst at Oanda, in a note, referring to a tumble for global equities in early February.
“While the situation has since settled down a lot and volatility has returned back to more normal levels, stocks remain around 5% off their highs in the U.S., more in Europe, while rates are not far from their recent highs.”
Read: Stocks could plunge another 25% if this happens, warns Goldman Sachs
What stocks may be active?
United Parcel Service Inc. UPS, +0.50%  shares rose close to 1%. The package delivery service announced it is suing the European Union’s antitrust watchdog for $2.15 billion plus interest over its decision to block a $7 billion merger with Dutch-based TNT Express NV in 2013.
Shares of Hibbett Sports Inc. HIBB, +1.00%  rose 2.2% after the retailer raised its fourth-quarter guidance.
How are other assets performing?
European stocks SXXP, +0.51% traded largely higher across the board, while Asian equities closed in positive territory.
The ICE U.S. Dollar Index DXY, -0.32% DXY, -0.32% was under pressure, down 0.3% to 89.647. Dollar weakness helped send gold higher, with the precious metal GCH8, +0.68% climbing $9.40, or 0.7%, to $1,339.70 an ounce. Crude-oil futures CLJ8, -0.08% CLJ8, -0.08% were down slightly, holding below $64 a barrel.

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