U.S. stock futures soared ahead of US inflation data on Wednesday, suggesting that major indices will resume this month’s recovery.
Futures linked to the S&P 500 rose 0.4%, while those of the Dow Jones Industrial Average rose 0.3%. Contracts on the high-tech Nasdaq-100 advanced 0.5%. Both the S&P 500 and the Dow closed lower on Tuesday after reaching record highs earlier in the week.
Stocks soared this month, with the S&P 500 benchmark reaching its eighth closing record of the year on Monday. Investors are betting that President Biden’s $ 1.9 trillion stimulus package will help boost the economy, while vaccines help reduce Covid-19 fatalities. Investor sentiment was also boosted by companies’ quarterly results, which largely proved to be better than expected.
“While earnings estimates are rising, stocks are also rising,” said Andrew Slimmon, managing director and portfolio manager at Morgan Stanley Investment Management. “The magnitude of the winning strikes we saw is so great because the gains have been underestimated.”
In out-of-hours trading, the hitchhiking company Lyft rose 12% after recording a narrower annual loss, suggesting that the company is moving towards profitability. Twitter grew 3.5% after the social media company said it added users during the holiday period. Cisco Systems fell 5.4% after announcing that revenue and profit for the second fiscal quarter declined.