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Traders work on the floor of the New York Stock Exchange during morning trading on May 30, 2023 in New York City.
Michael M. Santiago | Getty Images
Stock futures rose on Wednesday as Treasury yields continued to retreat from the 16-year highs reached last week. Investors also cheered a large merger in the energy space.
Futures tied to the Dow Jones Industrial Average traded 95 points higher, or 0.3%. S&P 500 futures added 0.3% and Nasdaq-100 futures gained 0.4%.
Exxon Mobil agreed to buy shale driller Pioneer Natural Resources in an all-stock transaction worth $59.5 billion, the largest merger announced on Wall Street this year. Pioneer shares were up 2% in early trading. Exxon was down by about 1%.
The 10-year Treasury yield was down more than 9 basis points to 4.56%. A day earlier, the benchmark U.S. yield fell, giving stocks a boost. The 30-stock Dow added 0.4% on Tuesday, while the S&P 500 gained 0.52% and the tech-heavy Nasdaq Composite jumped 0.58%.
“If rates continue to move lower, I think that will be the primary driver of a reasonable rebound in the equity market,” Lauren Goodwin, director of portfolio strategy at New York Life Investments said on CNBC’s “Closing Bell” on Tuesday.
“It’s also about supply and demand dynamics,” she added. “These past couple of days, we’ve had a little bit of relief from Fed narratives and also a little bit of risk mitigating type of buying. But Treasury supply is still overwhelming, we expect it to remain that way.”
Wall Street will get another clue into the state of inflation Wednesday with September’s producer price index report. Economists expect that the PPI gained 0.3% last month, according to Dow Jones.
In addition, minutes from the Federal Reserve’s latest meeting due in the afternoon will offer further insight into the central bank’s hiking cycle after it chose to skip an interest rate increase last month.
Traders are also looking ahead to Thursday’s consumer price index report for September.
Investors continue to assess the ongoing war unfolding between Israel and Hamas after the militant group launched an attack on Israeli civilians in what marked the deadliest offensive the country’s experienced in 50 years. President Joe Biden condemned the Hamas attacks as terrorism in remarks Tuesday and said that the United States stands with Israel.
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