Stocks rise with futures amid central-bank focus

Stocks rose with U.S. futures Thursday on speculation that Federal Reserve policy tightening will help fight elevated inflation without derailing economic growth.

Stocks rose with U.S. futures Thursday on speculation that Federal Reserve policy tightening will help fight elevated inflation without derailing economic growth. 

European and U.K. equities climbed as investors also awaited decisions from the European Central Bank and the Bank of England. S&P 500 and Nasdaq 100 contracts advanced, with tech giants including Apple Inc. rising in premarket trading, signaling more gains in store after Wednesday’s late rally. 

The Treasury yield curve steepened after the Fed said it will double the pace at which it tapers bond purchases, and projected three quarter-point interest-rate increases in 2022, another three in 2023 and two more in 2024. The dollar was lower, while the euro and the pound strengthened.

Equities have whipsawed in recent weeks as investors attempted to price in the prospect of rate hikes, while assessing risks from the spread of the omicron variant. The market’s early response to the Fed signals some relief arising from policy clarity, and optimism that the rebound from pandemic lows can weather the pivot away from ultra-loose monetary settings.

“The market is breathing a sigh of relief that the FOMC meeting suggested that it is taking inflation risks in the United States more seriously,” Ann-Katrin Petersen, an investment strategist at Allianz Global Investors, said in an interview with Bloomberg TV. “The question really will be whether the Fed will dare to do even more in order to taper the inflation risk.”