Nasdaq futures recover while global stocks rally

Global stocks extended a rally, and Nasdaq 100 Index futures rebounded, as Federal Reserve officials cautioned against disruptive policy tightening and U.S. companies signaled another strong earnings season.

Global stocks extended a rally, and Nasdaq 100 Index futures rebounded, as Federal Reserve officials cautioned against disruptive policy tightening and U.S. companies signaled another strong earnings season.

Contracts on the technology-heavy gauge rose 0.2 per cent, while those on the S&P 500 Index were little changed, after a two-day rally in New York led by dip-buying. A gauge of world stocks outside the U.S. headed for the biggest two-day gains in almost three weeks. The dollar weakened, while Treasury yields dropped. United Parcel Service Inc. jumped in early New York trading after predicting revenue above analysts’ forecasts.

Four Fed officials said they’ll back interest-rate increases at a pace that doesn’t disrupt the economy, calming markets unnerved by previous hawkish messages from the central bank. Investors are now debating whether the rally that pared the worst monthly rout in the S&P 500 since March 2020 will continue. They are also focusing on earnings releases to gauge the strength of the economic recovery.

“Good news is that some Fed officials are finally out trying to soothe investors’ nerves saying that they still want to avoid unnecessarily disrupting the U.S. economy,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “But what will really make the difference is the quantitative tightening and given the steep rise in Fed’s balance sheet since March 2020, even halting the growth would be an abrupt change.” 

Waves of volatility have swept across markets after the Fed signaled swifter monetary-policy tightening to curb inflation than many had expected. Investors need to “get used to this up and down volatility” as there’ll likely be more of it, Nancy Davis, chief investment officer at Quadratic Capital Management, said on Bloomberg Television.