US pre-open: Futures point to modest gains following sharp sell-off

US futures were pointing to modest gains ahead of the bell on Wednesday as stocks attempted to recover from a sharp sell-off in the previous trading session.

As of 1220 BST, Dow futures were up 0.53%, while S&P 500 and Nasdaq-100 futures had stocks opening 0.48% and 0.64% firmer, respectively.

The Dow closed 457.21 points lower on Tuesday, its biggest one-day slump since early May, as market participants continued to monitor the White House’s efforts to reopen the economy.

The main focus of Wednesday’s session will be an address from Federal Reserve chairman Jerome Powell at 1300 BST, with the Fed head expected to touch on a number of current economic issues.

Stocks in big tech firms like Microsoft, Facebook, Google parent Alphabet and Apple were all higher in pre-market trading as market participants continued to bet on resilient trading performances from the sector giants amid the Covid-19 pandemic.

Also in focus, the National Institute of Allergy and Infectious Disease‘s director Dr Anthony Fauci said on Tuesday that a vaccine would be essential in stopping the outbreak, but cautioned that it would be some time before a usable one was available. Fauci also noted that the US would likely face more “suffering and death” if states started to reopen too quickly.

With those fears in mind, the Los Angeles County public health director also said its stay-at-home order would “with all certainty” remain in effect until the end of July, while multiple states in the south began allowing non-essential businesses to resume operations.

On the macro front, mortgage applications from buyers jumped 11% last week, according to the Mortgage Bankers Association, as several US states reopened from the nationwide Covid-19 lockdown.

The gain also came despite average contract interest rates for 30-year fixed-rate mortgages rising from a record low 3.40% to 3.43%.

Still to come, month-on-month PPI data will be published at 1330 BST.

In the corporate space, Allergan, Jack in the Box, Royal Caribbean Cruises and Regis will all provide updates on recent trading throughout the course of the day.

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