Dow futures jump 170 points, S&P 500 poised to retake record

Dow futures jump 170 points, S&P 500 poised to retake record

Stock futures jumped on Thursday with the S&P 500 poised to surpass its record high set a week ago.

Futures on the Dow Jones Industrial Average added 176 points, or 0.5%, on Thursday. S&P 500 futures added 0.5% and Nasdaq 100 futures gained 0.6%.

A broad group of stocks were jumping in premarket trading and set to push the benchmark above a new all-time high. Tesla added more than 2%, while GM and Caterpillar each gained about 1%.

Despite a slight decline Wednesday, the S&P 500 is up 1.8% so far this week and sits just 0.4% from an all time high set last Tuesday, the day before a Federal Reserve policy update caused a dip in the market.

Investors await new jobs data set to be released at 8:30 a.m. ET which is expected to show weekly jobless claims fell to 380,000 from 412,000 the week prior, according to economists polled by Dow Jones. Data on durable goods orders will also be released.

Traders are also monitoring infrastructure package negotiations. A bipartisan group of Senators that have made progress on a plan will meet President Joe Biden at the White House Thursday.

Bank shares gained ahead of the Fed’s annual bank stress test results, which are scheduled for release after the bell on Thursday. The test examines how banks fare during various hypothetical economic downturns. Banks were forced to freeze dividends and stop buybacks during the pandemic. These results should give them the greenlight to eventually raise payouts. Goldman Sachs shares rose about 1% in premarket trading.

The S&P 500 snapped a two-day winning streak Wednesday, closing the regular session 0.1% lower. The Dow also shed 71.34 points, or 0.2%. Meanwhile, the Nasdaq Composite gained 0.1% to squeeze out another record closing high.

Despite Wednesday’s hiccup, the three major indexes are up more than 1% this week, rallying from a sell-off last week after the Federal Reserve heightened inflation expectations and forecast rate hikes as soon as 2023. Comments from Fed Chair Jerome Powell during a Congressional testimony Tuesday reiterated that inflation pressures should be temporary, which seemed to soothe market sentiment.

“Beneath the optimism, markets are at risk of becoming complacent – and vulnerable to shocks. Any signal that interest rates and bond yields could rise, even in the absence of pronounced inflationary pressure, could shatter market exuberance,” Gaurav Mallik, chief portfolio strategist at State Street Global Advisors, said.

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“Central banks will walk a tightrope between allowing the economy to run hot – which history has shown to be a bad idea – and managing inflation risk,” he added.

Darden Restaurants, Nike and FedEx are set to report quarterly earnings on Thursday.

— CNBC’s Hugh Son contributed reporting.

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