Stocks looked set to rise on Wednesday as investors zeroed in on dovish comments from Federal Reserve Chair Jerome Powell, rather than worrying too much about the latest flare-up in trade tensions between the U.S. and China.
Futures tracking the Dow Jones Industrial Average climbed 147 points, or 0.3%. S&P 500 futures added 0.5%, and contracts tied to the tech-heavy Nasdaq 100 gained 0.6%.
The yield on the 10-year U.S. Treasury note slipped 3 basis points to 4%. Gold futures jumped 1.3% to hit $4,218 an ounce, yet another record. The dollar was down 0.2% against a weighted basket of its peers.
The Dow pared back losses to make a major comeback on Tuesday after Powell signaled that weakness in the jobs market could give the Fed more scope to cut interest rates. Traders now think there’s a 95% chance the central bank will slash borrowing costs by half a point between now and the end of the year, according to the CME FedWatch tool. They were pricing in a 79% chance of that a week ago.
The prospect of lower rates was helping investors to look past fresh comments from President Donald Trump, who said in a post on Truth Social late Tuesday that his administration is considering “terminating business” with China on cooking oil and other “elements of Trade.”
Wall Street will also be keeping a close eye on another batch of quarterly earnings, with Bank of America and Morgan Stanley among the banks set to report. ASML issued confident guidance earlier Wednesday, raising hopes that the Dutch chip tool maker can continue to benefit from the AI boom. The company’s Amsterdam-listed shares climbed 2.9% in early European trading.