Investing.com - U.S. stock markets pointed to sharp gains at the open on Wednesday, looking to extend what had been the strongest one-day climb in four months in the previous session, as worries about the U.K.’s shock decision to leave the European Union abated, boosting appetite for riskier assets.
The blue-chip Dow futures jumped 113 points, or 0.65%, by 10:45GMT, or 6:45AM ET, the S&P 500 futures tacked on 14 points, or 0.69%, while the tech-heavy Nasdaq 100 futures added 33 points, or 0.77%.
European and Asian equites rallied, while the pound extended gains, with risk appetite reignited for a second straight session as concerns over the impact of the Brexit vote receded.
Outgoing U.K. Prime Minister David Cameron met with the European Council Tuesday but refrained from invoking Article 50, the treaty measure that would jump start the two year deadline for the U.K. to leave the European Union.
The heads of the EU's 27 other member states will continue their meeting on Wednesday without the U.K. present.
Meanwhile, investors looked ahead to data points to be released later in the U.S. session, including Fed chief Janet Yellen’s favorite inflation indicator, the core PCE price index for May, due at 12:30GMT, or 8:30AM ET.
The figure is expected to tick up just 0.2% on the month. With annualized rate forecast to show a 1.6% rise, the index remains below the Fed’s target of 2%, easing pressure to return to policy normalization.
Also at 12:30GMT, or 8:30AM ET, traders will eye May’s numbers on personal income and spending to gauge the health of the American consumer. At 14:00GMT or 10:00AM ET, the National Association of Realtors will release May pending home sales.
Futures markets are now reflecting a chance that the Federal Reserve could actually cut interest rates before the end of the year, instead of hiking them, in the aftermath of Britain’s shock vote to leave the EU.
According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 5% probability of a rate cut. Odds for a September rate cut stood at 10.5%.
Among active pre-market movers, Nike (NYSE:NKE) lost 4% ahead of the opening bell as the athletic apparel company's revenue and future orders fell short of estimates.
Drone-maker AeroVironment Inc (NASDAQ:AVAV) tumbled more than 7% after posting a decline in quarterly revenue and issued a financial outlook that largely fell short of expectations.
Companies slated to release earnings results on Wednesday include, Barnes & Noble (NYSE:BKS), Bed Bath & Beyond (NASDAQ:BBBY), Monsanto (NYSE:MON) and General Mills (NYSE:GIS).
Elsewhere, oil prices pushed higher on Wednesday, extending overnight gains, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell at a faster pace than expected last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, amid expectations for a drop of 2.4 million barrels. After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories fell by 3.9 million barrels in the week ended June 24.
U.S. crude tacked on 61 cents, or 1.3%, to $48.46 a barrel during morning hours in New York, while Brent was up 57 cents, or 1.2%, at $48.84 a barrel.