Stock futures edge lower after Wednesday’s big market rally

Seeking additional assets to diversify equity risk, says Xponance CEO Tina Byles Williams

Stock futures edged lower in overnight trade on Wednesday after the Dow Jones Industrial Average recovered from its lowest level of the year.

Dow-linked futures fell 49 points, or 0.16%, while S&P 500 and Nasdaq 100 futures lost 0.19% and 0.26%, respectively.

Stocks rose broadly overnight as the Bank of England said it would buy bonds to help stabilize its financial markets and a plunging pound. GBP/USD has fallen to record lows in recent days.

This marks a clear shift from aggressive tightening by many global central banks in response to soaring inflation.

In regular trading on Wednesday, the Dow rose 548.75 points, or 1.88%, to 29,683.74, while the S&P 500 rose 1.97% to 3,719.04 after hitting a new bear market low on Tuesday. Both indexes ended their six-day losing streak. The Nasdaq Composite added 2.05% to close at 11,051.64.

The yield on the benchmark 10-year U.S. Treasury note posted its biggest drop since 2020 after briefly breaching 4 percent as stocks rose and the Bank of England shared its bond-buying program.

“I wouldn’t be surprised if the market had a negative signal today, rather than a positive one,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “The market does what it does on any given day. You can try to pinpoint what’s behind it. Something that could happen, but it’s just an indoor game. A lot of it is that the market is really oversold and buyers are stepping on it.”

Wednesday’s rebound put the major indexes on track to maintain their modest gains for the week, but remain on track to end their worst month since June. The Nasdaq Composite led the monthly losses, down about 6.5%, while the Dow and S&P closed down 5.8% and 5.9%, respectively.

On a quarterly basis, the Nasdaq was on track to break its two-quarter losing streak, while the Dow posted its third straight quarterly decline for the first time since the third quarter of 2015. The S&P was on track for its third straight quarter of declines and the first consecutive quarter of negative growth since six straight quarters ended in the first quarter of 2009.

On Thursday, Nike, Bed Bath & Beyond and Micron Technology will continue to report earnings. Initial jobless claims and more speeches from Fed leaders are also due.

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