Futures rise as Evergrande concerns ease, Fed now in focus

FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly/File Photo

(Reuters) – U.S. stock index futures rose on Wednesday as concerns over China’s Evergrande eased after the property developer negotiated a domestic bond payment deal, with investors now awaiting policy cues from the Federal Reserve later in the day.

Evergrande’s main unit said it had negotiated a deal with bondholders to settle interest payments on a domestic bond, which helped calm fears of an imminent default that could unleash global financial chaos.

The S&P 500 has fallen for 10 of the past 12 sessions since hitting a record high, as fears of an Evergrande default exacerbated seasonally weak trends and saw investors pull out of stocks trading at lofty valuations.

Focus now turns to the Fed’s decision, due at 2 p.m. ET (1800 GMT) where the bank could possibly unveil plans to begin scaling back its massive coronavirus-related stimulus measures.

A raft of positive economic data in recent weeks has strengthened expectations for a taper announcement from the central bank by as soon as September.

Commodity-linked oil and metal stocks led gains in premarket trade, while a slight rise in Treasury yields supported major banks. However, most sectors were nursing steep losses in recent sessions.

U.S. S&P 500 E-minis were up 25.5 points, or 0.59%, at 06:26 a.m. ET. Dow E-minis were up 222 points, or 0.66%, with 50,454 contracts changing hands. Nasdaq 100 E-minis were up 57.75 points, or 0.38%.

The Nasdaq fell the least among its peers in recent sessions, as investors pivoted back into big technology names that had proven resilient through the pandemic.

Among individual stocks, Fedex Corp fell 5.8% on posting a lower quarterly profit and the delivery firm also cut its full-year earnings forecast.

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