US stock futures rebounded on Wednesday as investors assessed capacity for additional fiscal spending in the coming weeks after President Trump softened his earlier stance about supporting American homes, airlines and small businesses. .
Futures tied to the S&P 500 stood at 0.6%, suggesting the broad market gauge may gain after New York opens.
A few hours later, the president agreed to shift course. He said in a series of overnight tweets that he was “ready to sign now” if he was sent a stand-alone bill to send a check of $ 1,200 to Americans. He requested to approve a $ 25 billion package to support lawmakers’ salaries and gave another $ 135 billion package for the Paycheck Protection Program aimed at helping small businesses.
James McCormick, a strategist at NatWest Markets, said, “The retreat from the earlier tweet was quite remarkable.” “It makes people think he will do some targeted provocation.”
In premarket trading, shares in United Airlines rose 3.8% and Delta Air Lines rose 3.7% following Mr Trump’s tweet about the airlines’ support. Shares of RPM International rose 2.6% after reports of profit and sales for the August quarter by the manufacturer of building materials.
For a few weeks, investors have been skeptical that Democrats, the White House and Republicans will be able to bridge their differences on a comprehensive fiscal spending plan before November. 3. Many people are warned that the next round of provocations will continue. The new year, if a decisive electoral victory for one of the two major parties.
Michael Bell, global market strategist at JP Morgan Asset Management, said, “The market’s base case is that we’re going to get some incentive postelection.” “In many ways, a clear election result that leads to some stimulus — whether it is Republican-led or Democrat-led — is better than a vague result that leads to a continued lack of encouragement.”
Investors, meanwhile, are expected to begin at 9 a.m. ET, for the first Vice President’s debate, with further clues on how the election may play out. Surveys so far indicate that Democratic candidate Joe Biden has a wide edge over Mr. Trump after the first debate between the two candidates, but before being revealed by the president that he is a coronavirus.
Mr. Trump’s illness has added confusion and uncertainty to the 2020 campaign’s home stretch, questioning the Senate’s ability to move forward with a controversial Supreme Court confirmation process and a new bill of government aid to businesses.
On Tuesday, Federal Reserve President Jerome Powell warned of possible tragic economic consequences if businesses and households are not given additional support.
Investors will get more information on ideas from the Fed policymakers to support the economy when the minutes of the September meeting are released at 2pm.
The yield on the 10-year Treasury rose to 0.778%. The expectation that interest rates will be kept low has dropped US government-bond yields in recent weeks. But the yield closed 0.760% — the highest level since June, on Monday, before rising to 0.741% on Tuesday, raising expectations for a new fiscal stimulus deal.
Foreign, all-continental stocks Europe fell 600% 0.1%.
In Asia, market share remained mixed at the end of trading. Japan’s Nikkei 225 was largely flat, while Hong Kong’s Hang Seng index climbed 1.1%. Chinese markets on the mainland remained closed for the holiday.
International energy benchmark Brent crude fell 2.5% to $ 41.60 per barrel. Gold ticked down 1%.
—Jem Bartholomew contributed to this article.
Write Caitlin Ostroff at [email protected]
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