By Peter Nurse
Investing.com - U.S. stocks are set to edge higher Wednesday, rebounding after Tuesday’s losses, as investors balance worries about a potential second wave of the coronavirus with the likelihood of more fiscal measures to prop up the economy.
House Democrats have proposed another coronavirus relief bill, this time totaling $3 trillion, which includes funding for state and local governments and more direct stimulus payments for Americans during the Covid-19 pandemic. Senate Republicans have, however, said they won't support it.
At 7 AM ET (1100 GMT), S&P 500 Futures traded 17 points, or 0.6%, higher, Nasdaq Futures up 70 points, or 0.8%. The Dow futures contract rose 161 points, or 0.7%.
All the major indices on Wall Street fell around 2% on Tuesday after leading U.S. infectious disease expert Anthony Fauci warned lawmakers that a premature lifting of lockdowns could lead to additional outbreaks of the deadly coronavirus.
This comes after a new outbreak of the virus in not only Wuhan, the Chinese city where the pandemic started, but also the northeast city of Jilin and the South Korean capital, Seoul.
In the corporate sector, Gilead Sciences (NASDAQ:GILD) has struck a licensing agreement with five generic drugmakers to make remdesivir in 127 countries, ensuring the antiviral drug, which has helped shorten the recovery time of some hospitalized Covid-19 patients, can be delivered worldwide.
The banking sector will also be in focus after President Donald Trump suggested the Federal Reserve should look at negative interest rates.
Financial institutions have had to put aside billions to help cover potential loan losses in the first quarter, amid fears that the economic downturn caused by the Covid-19 outbreak will make it harder for borrowers to repay their debts. Negative interest rates will not help.
The attention will now turn on Federal Reserve Chairman Jerome Powell, who is sure to be asked about the subject while he’s a guest at a streaming event held by the Peterson Institute of International Economics at 9 AM ET (13:00 GMT).
Oil futures were mixed Wednesday, ahead of the official U.S. weekly oil inventories data, due later Wednesday, with crude stockpiles expected to continue their downward trend, albeit slightly.
At 7:05 AM ET, U.S. crude June futures traded 0.2% higher at $25.84 a barrel. The international benchmark Brent contract fell 0.2% to $29.94.
Elsewhere, gold futures rose 0.1% to $1,708.95/oz, while EUR/USD traded at 1.0861, up 0.1%.