US pre-open: Stocks set for fifth day of gains as investors shake off inflation worries
US futures pointed to a fifth day of gains on Wall Street on Thursday as investors shrugged off the higher-than-expected inflation print for January, with Cisco likely to lend support after well-received earnings.
At 1220 GMT, Dow Jones Industrial Average futures were up 1%, while S&P 500 and Nasdaq futures were 0.6% and 0.7% firmer, respectively. On Wednesday, stocks managed to end up again even as the year-on-year headline consumer price index for January showed a 2.1% gain, unchanged from December and above economists' expectations for a fall to 1.9%.
Craig Erlam, senior market analyst at Oanda, said: "It would appear stock markets are starting to regain some of their composure following a couple of very volatile weeks in which US indices fell more than 10% from their record highs.
"The Dow and S&P 500 both posted more than 1% gains on Wednesday and futures are seeing similar upside ahead of the open this morning. Volatility has remained quite elevated in recent sessions but we are slowly returning to more normal levels and are far from what we were experiencing last week. It would currently appear that last week’s plunge was just a sharp correction in an otherwise bullish market, although it may be too soon to say that with any real confidence."
In currency markets, the dollar was down versus the pound, the euro and the yen.
Jameel Ahmad, global head of currency strategy and market research at FXTM, said: "In reference towards why traders are becoming encouraged to resume selling the Dollar, it is likely linked to more clarification being provided following the EU GDP release this week, that showed the distance between economic recovery in the United States and other developed economies has continued to narrow.
"The United States is basically not on a pedestal of its own anymore when it comes to conversations of stronger economic growth and increased interest rates. This provides an opportunity for traders to price in yield into currencies elsewhere."
In corporate news, technology group Cisco Systems looked set to rally at the open after it reported its first rise in quarterly revenue in more than two years on Wednesday and struck an upbeat note on profit for the current quarter.
TripAdvisor also looked set for strong gains after the online travel company's quarterly earnings late on Wednesday beat expectations.
Avon Products was higher in pre-market trade as its fourth-quarter profit came in ahead of analysts' expectations, but sales fell a little short, while e-commerce company Shopify was also likely to be in focus as it posted a 71% jump in fourth-quarter revenue.
On the data front, initial jobless claims, the producer price index and the Philadelphia Fed manufacturing index are at 1330 GMT, while industrial production is at 1415 GMT and the NAHB housing market index is at 1500 GMT.