US open: Stocks rebound tech leads the way

US stocks are set to rebound on the open as dip buyers jump in. Treasury yields have eased slightly. However inflation concerns are likely to linger. US debt ceiling discussions could be in focus amid a quiet economic calendar.

USA (2)

US futures

Dow futures +0.24% at 34380

S&P futures +0.35% at 4370

Nasdaq futures +0.5% at 14851

In Europe

FTSE +0.73% at 7087

Dax +0.7% at 15370

Euro Stoxx +0.93% at 4097

Bargain hunters out in force

US stocks are set to rebound after yesterday’s blood bath. Dip buyers are out in force boosting stocks as treasury yields ease slightly. Yields had been quietly on the rise since the Fed meeting last week. However, Fed Chair Powell warning that the recent rise in inflation could last longer than initially expected, was the straw that broke the camels back sending stocks sharply lower.

Jitters surrounding elevated levels of inflation and slowing growth are likely to remain for some time. Whilst stocks are rising today the outlook is less clear. There are several factors in play, including supply chain bottle necks and labour market issues. Investors are trying to ascertain how these might play out what they could mean for inflation.

Perhaps the biggest fear is that the Fed will be forced to move at a faster pace that it anticipated on the back of stubbornly high inflation.

Tech stocks are leading the charge higher after taking the biggest hit in the previous session. Micron Technologies will be in focus and could weigh on the sector after providing the market with a disappointing outlook, despite beating on both revenue & profits.

US debt ceiling negotiations will continue. So far the market appears sanguine that a deal will be reached to avert a government shutdown

Where next for the S&P 500?

Once again the 100 sma has acted as a solid support for the S&P 500, with the index staging a rebound from here as it did last week. Buyers will be looking for a move over 4400 to expose the 50 sma at 4450 and cement the bullish trend. Meanwhile sellers will be looking for a move below the 100 sma at 4350 to bring the September low of 4300 into play.

FX – USD extends gains, EUR shrugs off improving sentiment

The US Dollar is rising extending gains from the previous session. The Dollar trades around the highest levels this year as investors reposition themselves for a more hawkish Fed. Following the FOMC last week the Fed look set to start tapering bond purchases at the end of the year.

EURUSD trades at fresh yearly lows on the back of USD strength. The Euro has shrugged off an unexpected rise in economic sentiment in the bloc.  Economic sentiment rose to 117.8 up from 117.6, defying expectations of a decline to 116.9.

GBP/USD  -0.37% at 1.3485

EUR/USD  -0.3% at 1.1650

Oil falls ahead of EIA data

Oil prices are slipping lower for a second straight session following an unexpected build in US crude oil inventories.

API data revealed a build of 4.127 million barrels last week. This was well over a draw of 2.333 million barrels expected and comes following a 6.1 million draw recorded the previous week.

Attention is now on official EIA data which is due later. Should this confirm the build in inventories, it will be the first build in 2 months.

The move lower comes after oil prices rallied hard across the past week on tight supply concerns and as demand rises as countries emerge from pandemic lockdowns. The OPEC world oil outlook report sees demand outstripping supply over the coming years.

An energy crunch in Asia is also helping to underpin the price of oil.

WTI crude trades -0.75% at $74.62

Brent trades +0.65% at $77.81

Looking ahead

15:00 US Pending home sales

15:30 EIA Crude Oil Stock Change

16:45 Fed Chair Powell Speaks

16:45 ECB Lagarde Speaks

How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

More from Indices

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account