By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Thursday, continuing the previous session’s strong gains after the Federal Reserve expressed confidence in the strength of the economic recovery, turning more aggressive in the speed of its tapering.
At 7:15 AM ET (1215 GMT), the Dow Futures contract was up 230 points, or 0.6%, S&P 500 Futures traded 33 points, or 0.7%, higher and Nasdaq 100 Futures climbed 125 points, or 0.8%.
The major averages closed firmly higher Wednesday, with the Dow Jones Industrial Average dropping just under 400 points, or 1.1%, the S&P 500 rose 1.6% and the Nasdaq Composite closed 2.2% higher.
The Fed kept interest rates near zero Wednesday, as expected, but said it would speed up the wind-down of its bond purchases and its timeline on rate hikes to curb elevated inflation.
Risk sentiment improved as the central bank predicted that the Covid-19 pandemic, despite the Omicron variant, would eventually dissipate, leaving in a strong economy with interest rates increasing slowly, inflation gradually easing and employment near record levels.
That said, investors are paying close attention to the Covid situation in the U.K. after Prime Minister Boris Johnson warned over the weekend of a coming “tidal wave” of cases, driven by the Omicron variant. On Wednesday, the U.K. reported its highest ever daily number of Covid cases since the pandemic began, with over 78,000 new infections.
The Bank of England decided to hike its interest rates for the first time since the pandemic, lifting its key rate to 0.25% from 0.1%, while the European Central Bank is expected, at 8:30 AM ET (1330 GMT), to confirm it will stop its bond purchases at the end of March, while keeping interest rates at all-time lows.
There are a number of economic indicators due for release later Thursday, including the weekly jobless claims data, November housing starts and building permits, November industrial production and December manufacturing PMI.
In the corporate sector, Apple (NASDAQ:AAPL) joined the fast-expanding list of companies that are either delaying the return to the office or putting it off indefinitely till the world has a tighter grip on Omicron.
Adobe (NASDAQ:ADBE) and Accenture (NYSE:ACN) are scheduled to report quarterly earnings before the opening bell, while FedEx (NYSE:FDX) and Rivian Automotive (NASDAQ:RIVN) are due after the bell.
Oil prices rose Thursday after U.S. crude stockpiles fell the most since September, suggesting demand remained strong in the world's largest consumer even as the Omicron variant of the Covid-19 virus threatens to curb global consumption.
U.S. crude inventories shrunk by 4.58 million barrels last week, according to a report from the Energy Information Administration released late Wednesday. This was a much larger drop than an industry report from the American Petroleum Institute had indicated on Tuesday.
By 7 AM ET, U.S. crude futures traded 1.4% higher at $71.83 a barrel, while the Brent contract rose 1.3% to $74.83.
Additionally, gold futures rose 1.2% to $1,785.90/oz, while EUR/USD traded 0.1% higher at 1.1296.