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Futures showed the S&P 500 on course for another record as a batch of well-received earnings, calmer bond markets and a monetary boost in China lifted risk appetite.

How are stock-index futures trading

  • S&P 500 futures
    added 22 points, or 0.4%, to 4917

  • Dow Jones Industrial Average futures
    rose 63 points, or 0.2%, to 38152

  • Nasdaq-100 futures
    climbed 132 points, or 0.7%, to 17663

On Tuesday, the Dow Jones Industrial Average
fell 96 points, or 0.25%, to 37905, the S&P 500
increased 14 points, or 0.29%, to 4865, and the Nasdaq Composite
gained 66 points, or 0.43%, to 15426.

What’s driving markets

Technology stocks looked like leading Wall Street higher again on Wednesday, after Netflix
jumped 10% in premarket trading following the streaming giant’s results that got the tech sector earnings season off to a good start.

“Although Netflix is not one of the Magnificent 7, it is still seen as a bellwether for the tech sector, and the health of the U.S. consumer,” said Kathleen Brooks, research director at XTB.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, agreed: “Netflix has fired the starting gun on consumer-led earnings and shown the crowds that things are looking promising.”

With the S&P 500 sitting at record levels, some investors feel it has become increasingly important that the earnings and forecasts of such high-profile names are well-received by the market.

“Strong Netflix results will likely give a positive spin to the major U.S. indices,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

U.S. companies reporting their numbers on Wednesday include AT&T
Abbott Laboratories
and Freeport-McMoRan
before the opening bell rings, followed after the close by some tech heavyweights such as Tesla
and Lam Research

The chip sector was also likely to be lifted by well-received results from ASML

which pushed shares in the Dutch maker of lithography systems for the semiconductor industry up 5% in European trading.

Broader support for the market was coming from Treasury’s, where the 10-year yield
was dipping to once again to trade around 4.1%.

The bond benchmark appears to have found equilibrium around that level following a rollercoaster ride in recent months, suggesting investors have become more relaxed about inflation, growth and the market’s pricing of the Federal Reserve’s policy trajectory.

Potential catalysts for bonds on Wednesday include the S&P flash U.S. services and manufacturing PMI reports due for release at 9:45 a.m. Eastern, and the Treasury’s auction of $61 billion of 5-year notes at 1 p.m.

Finally, global risk appetite was boosted in late Asian trading after China’s central bank said it would boost liquidity by reducing the reserves banks need to hold, sparking a second day of sharp gains for Chinese equities.

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