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U.S. equity futures edged higher Thursday, while Treasury yields and the dollar eased, as investors looked to snap a three-day losing streak on Wall Street thanks in part to solid early gains from the tech and chip sectors.
A sharp move higher in Treasury yields, which move in the opposite direction of prices, kept stocks firmly in the red for much of yesterday’s session following stronger-than-expected readings for both December retail sales and industrial production.
The data suggest that the U.S. economy, which has defied recession concerns for much of the past year, is carrying solid momentum that could both boost growth prospects and add a longer time frame to the Federal Reserve’s inflation fight.
That’s also forcing a reset of expectations for spring interest-rate cuts, which had driven the market higher into the final months of last year. Traders and investors now are focused on movements in the U.S. dollar and global commodity prices.
The dollar index, which tracks the greenback against a basket of six global currencies, snapped a five-day winning streak to change hands at 103.309 in the overnight session.
Benchmark 10-year Treasury note yields, meanwhile, eased 2 basis points (0.02 percentage point) from last night’s close to 4.083%. Two-year notes, which are the most sensitive to changes in interest rates, slipped to 4.329% following yesterday’s 14-basis-point surge.
The modestly weaker dollar allowed global oil prices to move higher in early New York trading, with investors looking to the International Energy Agency’s monthly demand report later in the session.
Brent crude contracts for March delivery, the global pricing benchmark, were last seen 43 cents higher at $78.32 per barrel while WTI futures for February added 59 cents to $73.15 per barrel.
On Wall Street, stocks look set for a modestly firmer open ahead of weekly jobless claims data at 8:30 a.m. U.S. Eastern Time and a reading of manufacturing activity around the Philadelphia region at 9:15 a.m. Eastern.
Atlanta Fed President Raphael Bostic is set to speak at 11:30 a.m. Eastern time, while President Joe Biden is slated to make a national address on the state of the economy early this afternoon.
Futures contracts tied to the S&P 500 are indicating a 15-point opening bell gain while those linked to the Dow Jones Industrial Average are priced for a 60-point bump.
Big premarket gains for chipmakers, tied to a better-than-expected earnings update from Taiwan Semiconductor, have the the tech-focused Nasdaq called 103 points higher.
In overseas markets, Europe’s Stoxx 600 was marked 0.26% higher in early Frankfurt trading, setting up the first session gain in three, while Britain’s FTSE 100 added 0.13%.
Overnight in Asia, stocks were mixed with the regionwide MSCI ex-Japan benchmark rising 0.41% into the close of trading while Japan’s Nikkei 225 ended the session 0.03% lower in Tokyo.
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