(Bloomberg) — U.S. stock futures rose as traders took comfort from the Federal Reserve's signal there is no plan to raise interest rates and looked forward to Apple Inc.'s upcoming earnings.
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S&P 500 futures rose 0.7%, with Apple and Amazon.com Inc. Nvidia Corp. gains small in pre-market trading. The yen was the center of attention in foreign currencies, recording another day of high volatility amid speculation that Japanese authorities intervened to support the currency.
Markets are celebrating the fact that the Fed has taken a more dovish stance than some expected, even after a series of statistics pointed to steady inflationary pressures. Chairman Jerome Powell said the central bank's next move was unlikely to be to raise interest rates, saying authorities would need to see convincing evidence that policy is not tight enough to bring inflation back toward the 2% target.
“Overall, it's a bullish message for markets,” said Benjamin Millman, chief investment officer at Edmond de Rothschild Asset Management. “We've got confirmation that Powell doesn't want to raise interest rates.”
More information on the health of the US economy will come from initial jobless claims and factory orders on Thursday, although the main focus will be on April nonfarm payrolls data due at the end of the week. The Bloomberg Economics model indicates a steady unemployment rate of 3.8%. This suggests “employment is likely to remain too hot for the Fed,” economists Andrei Sokol and Scott Johnson wrote in a note.
Apple's numbers, due after the US market closes, will give investors a better idea of how the iPhone maker is overcoming declining sales, partly due to a slowdown in the Chinese market.
“Earnings look very resilient, quite constructive on the equity side,” John Woods, director of IT for the Asia-Pacific region at Lombard Odier, said in an interview with Bloomberg TV. “It's a mostly American story right now.”
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In Europe, stocks witnessed small movements amid mixed reports from companies. Pharmaceutical company Novo Nordisk A/S fell after disappointing results and transportation giant Moller-Maersk A/S fell. Shell Plc advanced after the energy producer posted higher earnings and announced a $3.5 billion share buyback.
Yen slice
The Japanese yen fell as much as 1.1% against the dollar, after rising late Wednesday in New York. The renewed decline indicates that investors are skeptical about the ability of Japanese authorities to prevent the currency from weakening, given the country's large interest rate differential with the United States.
The Hang Seng Index jumped more than 2%, putting it on track to enter a technical bull market. Hong Kong's currency peg to the US dollar burnishes its safe-haven appeal amid the threat of higher US interest rates for longer.
In commodities, oil recovered Wednesday's losses and gold advanced.
Main events this week:
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US Factory Orders, Initial Jobless Claims, Trade, Thursday
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Apple earnings Thursday
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Unemployment in the eurozone, Friday
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US Unemployment, Nonfarm Payrolls Report, ISM Services, Friday
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Chicago Fed President Austin Goolsbee speaks Friday
Some key movements in the markets:
Stores
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S&P 500 futures rose 0.7% as of 7:03 a.m. New York time
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Nasdaq 100 futures rose 0.9%.
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Dow Jones Industrial Average futures rose 0.5%
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The Stoxx Europe 600 index was little changed
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MSCI World Index rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index fell 0.4%.
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There was little change in the euro at $1.0703
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The British pound fell 0.1 percent to $1.2513
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The Japanese yen fell 0.3 percent to 155.07 yen to the dollar
Digital currencies
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Bitcoin rose 1.3% to $58,059.01
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Ethereum rose 1.8% to $2,989.74
Bonds
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The yield on the 10-year Treasury note fell three basis points to 4.60%.
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The yield on 10-year German bonds fell by four basis points to 2.54%.
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The yield on British 10-year bonds fell seven basis points to 4.29%.
Goods
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West Texas Intermediate crude rose 0.6% to $79.50 a barrel
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Gold in spot transactions fell 0.9 percent to $2,299.62 per ounce
This story was produced with assistance from Bloomberg Automation.
–With assistance from Winnie Hsu, Richard Henderson, and Katherine Bosley.
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