US stock futures increased on Wednesday, fueled by optimistic expectations for interest-rate cuts, as more Wall Street banks reported strong performances, kicking off a positive earnings season.
The futures for the Dow Jones Industrial Average (YM=F) rose about 0.5% after a turbulent session on Tuesday. Meanwhile, contracts for the S&P 500 (ES=F) and the Nasdaq 100 (NQ=F) saw increases of 0.7% and 0.9%, respectively.
A robust start to the earnings season is helping to uplift market sentiment amidst ongoing US-China trade tensions and an unresolved government shutdown.
Before trading commenced, Bank of America (BAC) reported a 23% increase in profits, capitalizing on this summer’s high volume of major Wall Street deals. Morgan Stanley (MS) experienced a 45% profit jump, which its CEO described as an “outstanding” quarter.
Additional reports from PNC Financial (PNC) and Abbott Laboratories (ABT) also stood out this morning. Prior unexpected successes from ASML and LVMH contributed to stock boosts.
Meanwhile, Jerome Powell‘s comments provided further support. The Federal Reserve Chair indicated that rising “downside risks to employment” might lead to more anticipated rate cuts. Investors are keenly analyzing Powell’s statements, especially with critical economic data being postponed due to the federal shutdown.
Investor sentiments are increasingly leaning towards the likelihood of a rate cut later this month, with expectations for December jumping to about 95% recently.
