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Futures, Tech Stocks Jump After Fed Officials Talk Down Inflation Risks

US equity futures and tech stocks gained for a second day, rising alongside European and Asian stocks after Fed officials on Monday played down the risk of “non-transitory” inflation easing bond yields for the fourth straight day, as investors waited for consumer-confidence data.  At 7:00 a.m. ET, Dow e-minis were up 75 points, or 0.2%, S&P 500 e-minis were up 11 points, or 0.26%, and Nasdaq 100 e-minis were up 63.75 points, or 0.47%.

“Monday’s lethargy seems to have been shaken off after a chorus of Fed voices delivered dovish statements, downplaying arguments for early tightening,” said Nema Ramkhelawan-Bhana, an analyst at Rand Merchant Bank in Johannesburg, “Let’s not forget that it only takes one inflation print to unsettle investors or a strong economic figure to guide nominal yields higher. And so the lesson is to make hay while the sun shines.”

The S&P 500 and the Nasdaq ended about 1% higher on Monday after Federal Reserve officials maintained that the U.S. central bank’s ultra-easy monetary policy will remain in place, pushing the longer-dated U.S. Treasury yields lower. Lael Brainard, Raphael Bostic and James Bullard said they wouldn’t be surprised to see bottlenecks and supply shortages push prices up in coming months as the pandemic recedes, but that much of those gains should be temporary. While market-based measures of inflation expectations have dipped, investors remain cautious about the risk of a pullback in stimulus. They are also monitoring Covid-19 spikes in regions such as Asia.

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