Investors will be watching US stocks today, with all three major indices closing at record highs yet again.
Context: US stocks closed higher again on Wednesday as investor concerns eased following what was considered a slowdown in coronavirus confirmed cases. However, today China reported a sharp rise in confirmed cases to reach almost 60,000.
Details: After closing at a record high on Tuesday, US indices continued their upward momentum of setting new records on Wednesday. Communication stocks delivered a strong performance.
The Dow, which was lifted by strong gains from Nike and UnitedHealth, led the rally. The index climbed 275 points to close at 29,551.42. Meanwhile, the S&P 500 rose 0.7% and the Nasdaq added 0.9% on Wednesday. Investor sentiment was also boosted by Fed Chair Jerome Powell’s testimony in front of the Senate.
Energy shares rallied on Wednesday, despite of the OPEC cutting its demand growth outlook. The EIA’s report of oil inventories also came in larger than expected.
In other news, yield on the US 10-year Treasury rose to 1.6299%, after reaching a low of 1.5% at the end of January. The US dollar continued this rise, with global investors preferring greenback-denominated assets.
Why it matters: The rally in stocks, driven by a slowdown in new coronavirus cases, could take a complete U-turn today. US stock futures are also pointing towards a lower open this morning. The downward movement in futures came in after China’s government reported a surge in new cases, although saying that this was due to a change in the method of counting infected patients. The total number of cases in Hubei Province climbed to around 50,000 using the new method. Futures on the Dow, S&P and Nasdaq 100 were all down more than 0.6%.
What to watch: The market will look at the major indices, with stock futures pointing towards a lower start. Investors will also keep a close eye on consumer prices and initial jobless claims reports, which are important indicators of economic growth.
Other Markets: Most European indices are trading lower on Thursday, with the FTSE 100, DAX 30, IBEX 35 and Stoxx 600 down 1%, 0.5%, 0.6% and 0.5%, respectively.