Stock futures are up after record set by Dow

Investor demand for equities has been revived as bond markets have calmed down. The yield on 10-year Treasury bonds, moving inversely with price, fell to 1.502% from 1.520% Wednesday, putting it on track for a third consecutive day of declines. Yields climbed to 1,594% earlier this week.

Stocks have been plagued by sharp moves in bond yields fueled by uncertainty about how the $ 1.9 trillion relief bill passed by the House on Wednesday will ripple through the US economy.

Concerns that the magnitude of the stimulus would increase inflation outside of the Federal Reserve’s comfort zone and cause interest rates to rise recently led interest rates to rise. That diminished interest in stocks in technology companies, which had benefited from a prolonged period of low interest rates. At the same time, optimism about the economic outlook has fueled demand for shares of companies that would benefit from an easing of lockdowns.

Muted inflation data for the start of the year has calmed nerves about the interest rate outlook. But bond yields are likely to remain volatile and momentum shift between different segments of the stock market, said Monica Defend, head of research at French asset manager Amundi.

“Ultimately, it should be positive for the stock market if we have a little more inflation, a little more growth,” she said.

Tech stocks including Apple, Twitter and data mining company Palantir Technologies climbed the bell in New York. Oracle fell 4.5% after the software giant reported its gains on Wednesday.

Shares of video game retailer and online trading sensation GameStop fell about 9% for the market. Volatility has returned in recent sessions to the so-called meme stocks that are the darlings of individual investors gathering on internet forums.

Data on the number of people claiming unemployment benefits, a proxy for unemployment, will be released at 8:30 a.m. ET. Economists surveyed by The Wall Street Journal expect 725,000 workers to file for first-time benefits last week. That would represent a slight drop from the previous week and would be a further sign of improvement in the labor market following an easing of Covid-19 case numbers.

“We’re not quite out of the woods yet on the unemployment rate,” said Mary Nicola, a portfolio manager at PineBridge Investments. Labor market health will be a major determinant of when the Fed decides to raise interest rates, she added.

Investor interest in US government debt will be tested again on Thursday with the planned auction of $ 24 billion in 30-year bonds. The Treasury sold $ 58 billion in three-year notes on Tuesday and $ 38 billion in ten-year notes on Wednesday.

In overseas markets, the Stoxx Europe 600 rose slightly by 0.3%.

The euro was trading 0.3% to $ 1.1964, ahead of the European Central Bank’s latest monetary policy decision, scheduled for 7:45 a.m.ET. Investors expect ECB President Christine Lagarde to comment on the region’s recent rise in bond yields in the subsequent press conference. The bank will also publish its quarterly economic forecasts for the eurozone.

“The eurozone cannot afford a tightening of financial conditions and we have imported that from the higher tariffs in the US,” said Ms. Defend. “It’s something the ECB looks at as a concern.”

China’s Shanghai Composite Index rose 2.4% in its largest one-day rise since October. The advance followed an article in a financial newspaper encouraging new investors to strive for long-term returns and not be affected by stock volatility, said Jim Reid, Deutsche Bank strategist.

Markets rallied elsewhere in Asia, with Japan’s Nikkei 225 and South Korean Kospi gaining 0.6% and 1.9% respectively.

Write to Joe Wallace at [email protected]