By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Wednesday, with the tech sector leading the way ahead of more testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen to Congress.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 100 points, or 0.3%, S&P 500 Futures traded 14 points, or 0.4%, higher, and Nasdaq 100 Futures climbed 100 points, or 0.8%.
Powell and Yellen will continue their testimony to the U.S. House Committee on Financial Services later Wednesday, after starting their two days of congressional hearings on Tuesday.
Powell repeated on Tuesday the Federal Reserve's view that any inflation rise this year will likely be a "one-off," stressing the central bank has the tools to ensure inflation is kept well anchored to its 2% target. He, along with Yellen, also acknowledged that some areas of the markets are richly valued, but they were not concerned about financial stability.
This was enough to cause U.S. bond yields to fall Tuesday, with the benchmark 10-year Treasury yield seen around 1.63%, significantly below the 1.75% level seen last week.
Higher yields have pressured the tech sector in particular, as these stocks have seen significant gains over the last year or so on the back of hefty borrowing in order to try and generate long-term growth.
Despite these gains, doubts remain about the strength of the global economic recovery, and are unlikely to be dispelled by stronger-than-expected purchasing managers indices out of Europe overnight.
Investors will thus look at the release of durable goods orders, at 8:30 AM ET (1230 GMT), for guidance, with economists expecting capital spending for February to slow from the prior month's 3.4% increase.
In the corporate sector, GameStop (NYSE:GME) stock is lower premarket after the video games retailer disappointed with its first-quarter earnings and plans to raise fresh capital, while Intel (NASDAQ:INTC) stock is higher after the chipmaker announced plans to invest $20 billion in building two new plants in Arizona.
Oil prices surged Wednesday, helped by a large container ship blocking the Suez Canal after running aground, likely limiting supply through one of the world’s most important trade routes.
This helped to overturn the recent bearish sentiment based on worries about a slow recovery to demand given the fresh lockdowns in Europe and a build in U.S. crude inventories of 2.9 million barrels last week, according to the American Petroleum Institute, an industry body.
Official data from the Energy Information Administration are due later in the session.
U.S. crude futures traded 2.5% higher at $59.19 a barrel, while the Brent contract rose 2.3% to $62.20. Both benchmarks have still fallen over 8% over the last week.
Elsewhere, gold futures rose 0.3% to $1,729.75/oz, while EUR/USD traded 0.2% lower at 1.1826.