Futures tick higher, Nike jumps after solid quarter

Traders work on the floor of the NYSE in New York
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 21, 2022. REUTERS/Brendan McDermid

March 22, 2022

(Reuters) – U.S. stock index futures edged higher on Tuesday, with bank stocks gaining on growing bets of aggressive interest rate increases by the Federal Reserve, while Nike climbed after upbeat third-quarter results.

Fed Chair Jerome Powell said on Monday the U.S. central bank must move “expeditiously” to combat inflation, and possibly “more aggressively” to keep an upward price spiral from getting entrenched.

Traders now see a 67.6% chance of a 50 basis point (bps) rate hike by the Fed at its May policy meeting following Powell’s comments. The U.S. central bank last week raised interest rates by 25 bps, the first increase since late 2018. [IRPR]

Big banks gained in premarket trading, with Bank of America and Wells Fargo up 1%. The benchmark 10-year yield hit 2.34%, its highest level since mid-May 2019.

Nike shares advanced 5.7% as the world’s biggest sportswear maker beat quarterly estimates for profit and revenue, and said manufacturing issues pinching sales over the past six months were now behind it.

Meanwhile, Russia’s coupon payment on a sovereign bond maturing in 2029 was processed by correspondent bank JPMorgan Chase & Co, a source said on Monday, the second time in recent days the country appears to have averted default.

Ukraine’s military warned the public of more indiscriminate Russian shelling from bogged-down Russian troops, and U.S. President Joe Biden issued his strongest warning yet that Russia is considering using chemical weapons.

Rising uncertainty around the conflict and hawkish comments from Powell weighed on investor sentiment on Monday, with the Wall Street’s main indexes snapping a four-session winning streak.

At 06:25 a.m. ET, Dow e-minis were up 149 points, or 0.43%, S&P 500 e-minis were up 14 points, or 0.31%, and Nasdaq 100 e-minis were up 38.25 points, or 0.27%.

Tesla Inc rose 1.5%, leading gains among the mega-cap growth stocks, as the electric carmaker geared up to deliver to customers the first 30 Model Y cars made at its 5 billion euro ($5.5 billion) European plant.

Energy stocks were mixed after rallying sharply in the previous session as oil prices eased. [O/R]

Alibaba Group Holding jumped 8.3% after the Chinese e-commerce giant raised its share buyback program to a record $25 billion.

(Reporting by Devik Jain in Bengaluru; Editing by Sriraj Kalluvila)

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