Wall Street was set Friday to extend a rally that kicked off 24 hours ago, with stock-index futures surging after China’s central bank cut interest rates and as a clutch of heavyweight tech stocks rose in the wake of strong earnings.
Investors piled into riskier assets such as equities, sending European markets sharply higher. Meanwhile, government bonds sold off. The yield on the 10-year Treasury note rose 6 basis points to 2.09%, implying a rotation from bonds to stocks.
Futures for Dow Jones Industrial Average jumped 152 points, or 0.9%, to 17,561, while those for the S&P 500 index advanced 16 points, or 0.8%, to 2,069. Futures for the Nasdaq-100 index climbed 62 points, or 1.4%, to 4,615, as shares of Amazon.com, Google parent Alphabet Inc. and Microsoft Corp. jumped about 10% apiece in premarket trade after earnings results.
The main indexes already were heading higher when just a couple of hours ahead of Wall Street’s open, the People’s Bank of China cut its one-year deposit rate by 25 basis points to 1.5%. The PBOC lowered its one-year lending rate by 25 basis points to 4.35%.
Fueled by better-than-expected corporate results and hints of more easing measures from European Central Bank President Mario Draghi, stocks finished sharply higher Thursday. The Dow industrials closed up 320.55 points, or 1.9%, at 17,489.16, the biggest point and percentage gain since Sept. 8.
With central banks in the spotlight, more attention will now turn to the Federal Open Market Committee meeting Oct. 27 and 28, and the Bank of Japan’s monetary policy meeting on Oct. 30.