Wednesday June 1st


Dow futures rise about 200 points to start June

U.S. stock index futures were mostly higher Wednesday as Wall Street turned the page to another month following a volatile May. Futures tied to the Dow Jones Industrial Average added 210 points, or 0.6%. S&P 500 futures rose 0.5%. Nasdaq 100 futures ticked up 0.6%. Boosting investor sentiment, Salesforce’s first-quarter results topped expectations. The stock rose more than 8% in premarket trading. Shares of Delta Air Lines also rose more than 1% premarket after the company raised its revenue forecast due to a surge in travel demand and fares. The moves in early morning trading came after a down day for stocks, with the Dow falling 222.8 points in another choppy trading session to close out the month. The S&P 500 and Nasdaq Composite dipped 0.6% and 0.4%, respectively. For the month of May, the Dow and S&P 500 finished little changed, after last week’s strong rally chipped away at long losing streaks for the indexes. The Nasdaq Composite underperformed, shedding more than 2%. However, the ride for stock investors was far choppier than the month-end results suggest. The S&P 500 briefly dipped into bear market territory last month, trading more than 20% below a record at one point. The Nasdaq, meanwhile, is deep in a bear market — down 25.5% from an all-time high. Traders pored over a raft of mixed quarterly results that included some big misses from bellwether names like Walmart. Meanwhile, the Federal Reserve at the start of May hiked rates by 50 basis points to quell an inflationary surge not seen in decades. The first day of June marks the start of the Fed’s plan to reduce its balance sheet, which ballooned to nearly $9 trillion during the Covid pandemic. With the first-quarter earnings season nearly complete and the Fed having strongly signaled its rate hike intentions for its next two meetings, stocks could struggle for direction over the summer. “It’s best to wait and see how the next quarter shakes out. When we get into late July, we’ll have a better picture. Until then, I think we’re going to see very much a choppy market with a bias towards falling further into a bear market,” said Max Gokhman, chief investment officer at AlphaTrAI. Shares in Asia-Pacific were mixed on Wednesday, with investors watching for market reaction to the release of a private survey on Chinese factory activity for May. Mainland Chinese stocks closed mixed, with the Shanghai Composite sliding 0.13% to 3,182.16 while the Shenzhen Component was gained 0.205% to 11,551.27. Hong Kong’s Hang Seng index slipped 0.55%, as of its final hour of trading. The Nikkei 225 in Japan gained 0.65% to close at 27,457.89 while the Topix index advanced 1.36% to 1,938.64. Oil prices firmed on Wednesday after European Union leaders agreed to a partial and phased ban on Russian oil and as China ended its Covid-19 lockdown in Shanghai. Brent crude gained 1.3% to trade at $117.09. U.S. West Texas Intermediate (WTI) crude advanced 1.8% to $116.02 per barrel. Both benchmarks registered gains over May, marking the sixth straight month of rising prices. “The mood on the oil market is seemingly turning ever more bullish,” said Julius Baer analyst Norbert Rucker. “Europe’s embargo and China’s partial reopening is fueling supply fears and lifting oil prices.” Gold prices slid to a two-week low on Wednesday on a stronger dollar and U.S. Treasury yields amid renewed global inflation concerns that could prompt aggressive monetary policy measures. Spot gold was down 0.4% to $1,830.66 per ounce by 1147 GMT, after hitting its lowest since May 19 at $1,827.80. U.S. gold futures were down 0.9% at $1,832.50. Rising real yields in the United States and continental Europe and a firm dollar are negative factors for gold, said analyst Peter Fertig at Quantitative Commodity Research.