US Stocks- Futures rise after two-day selloff on Wall Street

US Stocks: Futures rise after two-day selloff on Wall Street

U.S. stock index futures rose on Friday after a selloff in the previous session driven by hawkish comments from a Federal Reserve official that stoked fears of more aggressive rate interest hikes from the central bank.

St. Louis Fed President James Bullard said on Thursday the U.S. central bank needs to keep raising interest rates given that its tightening so far “had only limited effects on observed inflation”.

All the three major U.S. indexes posted losses for the second straight session on Thursday and are eyeing weekly declines after notching solid gains last week.

Also Read: Global equity funds attracts inflows as US inflation concerns ease

“We spent most of the day recovering from comments from the Fed about the direction of interest rates,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“Markets are getting a little bit more comfortable with the fact that (a Fed pivot) is not likely.”

The Fed is expected to downshift to a 50-basis point rate hike in December, but economists polled by Reuters say a longer period of U.S. central bank tightening and a higher policy rate peak are the greatest risks to current outlook.

The retreat in stocks after Bullard’s comments “shows how sensitive markets can be when it comes to the eventual destination of the terminal rate,” said Michael Hewson, chief market analyst at CMC Markets.

At 7:07 a.m. ET, Dow e-minis were up 197 points, or 0.59%, S&P 500 e-minis were up 31.25 points, or 0.79%, and Nasdaq 100 e-minis were up 116.25 points, or 0.99%.

Gap Inc gained 8.6% in premarket trade after the retailer surpassed quarterly sales and profit estimates, helped by steady demand despite a surge in inflation.

U.S.-listed shares of JD.com Inc gained 5.3% after the e-commerce firm posted better-than-expected third-quarter revenue, as COVID-19 lockdowns in China led more consumers to shop online.