(Reuters) – U.S. stock index futures jumped on Wednesday as risk appetite returned after a sharp sell-off earlier in the week. Sentiment was also boosted by cautious comments on interest rate hikes from an influential Bank of Japan policymaker.
Major technology stocks continued their recovery, rising more than 1 percent in premarket trading.
Wall Street’s major indices ended Tuesday with strong gains after comments from Federal Reserve officials eased fears of a U.S. recession following last week’s weak economic data.
Attention turned back to earnings. Super Micro Computer lost 12.7 percent after reporting an adjusted gross margin below estimates. Rival Dell Technologies lost 2.4 percent.
Airbnb fell 16% after the company forecast third-quarter revenue that fell short of estimates and warned of shorter booking windows, suggesting travelers were waiting until the last minute to book due to economic uncertainty.
At 5:12 a.m. ET, the US S&P 500 E-minis were up 55.5 points, or 1.05%, with 212,861 contracts changing hands, the Nasdaq 100 E-minis were up 220.5 points, or 1.21%, and the Dow E-minis were up 310 points, or 0.79%.
Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said in a speech to business leaders that the central bank would not raise interest rates if financial markets were unstable.
The BoJ’s interest rate hike on July 31 triggered a global equity market collapse as the yen rose sharply and investors unwound large positions in currency carry trades used to finance high-yield assets.
“The silver lining is that while the current volatility may be painful, a reset after a period of excessive optimism could lead to a healthier market,” said Oliver Blackbourn, portfolio manager in the multi-asset team at Janus Henderson.
“It is important to understand that while a soft landing is questionable, it is not impossible. That said, economic resilience and falling interest rates could ultimately help to revive riskier assets.”
Wall Street’s fear indicator, the CBOE Volatility Index, fell to 23.43 points from its high of 65.73 on Monday.
Markets are now awaiting further comments on monetary policy from Federal Reserve officials next week, ahead of the Jackson Hole event where Fed Chairman Jerome Powell is scheduled to speak.
Among other things, Boeing shares rose 1.5 percent on plans to make design changes to prevent cabin panels from bursting during flight, as happened on an Alaska Airlines 737 MAX 9 flight in January.
Amgen shares fell 4.0% after the pharmaceutical company said its second-quarter profit fell 1% as higher expenses offset a 20% increase in sales.
Rivian fell 6.3% after the company forecast that production would not increase this year and said deliveries would be slightly lower in the third quarter.
(Reporting by Shubham Batra in Bengaluru; Editing by Sriraj Kalluvila)
