(Reuters) – Wall Street index futures kicked off October on a positive note after the U.S. Congress averted a government shutdown, while investors awaited comments from Federal Reserve Chair Jerome Powell for clues on the central bank’s interest-rate path.
The Congress passed a stopgap funding bill on Saturday with overwhelming Democratic support after Republican House Speaker Kevin McCarthy backed down from an earlier demand by his party’s hardliners for a partisan bill.
Investors, meanwhile, await Powell’s comments at 11 a.m. ET, along with Philadelphia Fed President Patrick Hasker’s remarks, at a roundtable discussion with local employers and small business owners to discuss the efforts to grow the local economy.
Later in the day, Cleveland Fed President Loretta Mester will speak on the outlook for the U.S. economy.
“We believe the rates set by major central banks may be nearing a peak – a positive for equity markets – but the lagged effects of this potent rate-hiking cycle still present the risk of recessions, as we have seen in Germany this year,” said Helen Jewell, CIO at BlackRock Fundamental Equities, EMEA.
Yields on the 10-year Treasury note edged higher on Monday, with the 2-year note, which best reflects interest rate expectations, still above 5%. [US/]
Wall Street’s main indexes ended the third-quarter lower on fears of interest rates staying higher for longer after a rally in oil prices pushed Brent crude to near $100 per barrel, fueling inflation.
Data last week showed a better-than-expected but a still-high inflation, while investors adjusted their portfolios on the final trading day of a weak quarter.
A slew of economic data including U.S. manufacturing activity and the crucial monthly jobs reports at the end of the week is on investors’ radar for more clues on the Fed’s interest-rate path.
At 4:56 a.m. ET, Dow e-minis were up 138 points, or 0.41%, S&P 500 e-minis were up 21.75 points, or 0.5%, and Nasdaq 100 e-minis were up 104.25 points, or 0.7%.
In premarket trading, crypto-linked stocks including Riot Platforms, Marathon Digital and U.S.-listed shares of Hut 8 Mining were up between 8% and 12% after bitcoin hit near two-month highs.
Shares of Coinbase climbed 5.3% after the cryptocurrency exchange got the Singapore payments licence from the city-state’s central bank.
(Reporting by Shubham Batra in Bengaluru; Editing by Vinay Dwivedi)
