NEW YORK (AP) — Wall Street pointed higher Thursday ahead of two days of U.S. employment data that could offer hints as to how employers are managing spiraling costs and rising interest rates with the Federal Reserve pursuing an aggressive push to reign in inflation.
Futures for the Dow Jones industrials rose 0.5% and futures for the S&P 500 gained 0.4%. Lower oil prices have eased inflation anxiety somewhat.
Shares in Europe ticked higher on a day that British Prime Minister Boris Johnson announced that he was resigning amid a flood of resignations from his Conservative Party’s members.
Oil prices edged up but remain below $100 per barrel.
Investors worry aggressive U.S. and European rate hikes to contain prices rises that are running at a four-decade high might depress global economic activity.
“Stocks rose because runaway commodity and oil prices are sinking,” said Stephen Innes of SPI Asset Management. “Both are the critical targets Fed policy is engineered to tame; hence, inflation expectation is coming under control.”
On Thursday, the Labor Department releases its weekly jobless claims report, which generally tracks the number of U.S. layoffs. On Friday comes the more detailed June jobs report, which will give investors a more granular look at how certain sectors of the economy are handling four-decade high inflation and rapidly rising interest rates.
The job market has remained very strong in the aftermath of the coronavirus outbreak, but there have been some signs that the landscape may grow more challenging.
On Wednesday, the Labor Department reported that U.S. employers advertised fewer jobs in May amid signs that the economy is weakening, though the overall demand for workers remained strong.
In midday trading, the FTSE 100 in London gained 1.3%, the DAX in Frankfurt added 1.6% and the CAC 40 in Paris advanced 1.5%.
In Asia, the Shanghai Composite Index rose 0.3% to 3,364.40 and the Nikkei 225 in Tokyo gained 1.5% to 26,490.53. The Hang Seng in Hong Kong closed 0.3% higher at 21,643.58 after spending much of the day in negative territory.
The Kospi in Seoul climbed 1.8% to 2,334.27 and Sydney’s S&P-ASX 200 was up 0.8% at 6,648.00.
India’s Sensex advanced 0.7% to 54,107.97. New Zealand declined while Southeast Asian markets advanced.
On Wednesday, the Fed released notes from latest meeting saying “an even more restrictive stance could be appropriate” to get inflation back to its 2% target. Fed officials acknowledged that could weaken the economy.
Major U.S. indexes closed higher following Wednesday’s Fed release.
The Fed raised its key interest rate last month by three-quarters of a point to a range of 1.5% to 1.75%, the biggest single increase in nearly three decades. Chair Jerome Powell suggested at that time a rate hike of one-half or three-quarters of a point, three times the Fed’s usual margin, was likely when policymakers meet later this month.
Notes released Wednesday from the Fed’s June 14-15 meeting confirmed other officials agreed that such an increase would “likely be appropriate.”
Inflation has been boosted by Russia’s attack on Ukraine, which pushed up prices of oil and other commodities, and Chinese anti-virus controls that shut down Shanghai and other industrial centers and disrupted supply chains.
Oil prices closed below $100 per barrel on Tuesday for the first time since early May, but U.S. crude is still up more than 30% this year.
Benchmark U.S. crude gained 96 cents to $99.49 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 97 cents to $98.53 a barrel Wednesday. Brent crude, the price basis for international trading, rose 91 cents to $101.60 per barrel in London. It tumbled $2.08 the previous session to $100.69.
The dollar dipped to 135.63 yen from Wednesday’s 135.98 yen. The euro edged up to $1.0194 from $1.0182.
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