Traders will work on the floor of the New York Stock Exchange (NYSE) in New York on Monday, August 23, 2021.
Michael Nagel | Bloomberg | Getty Images
Stock futures were flat in overnight trading Thursday after two consecutive days of gains pushing key averages for the week into positive territory.
Futures on the Dow Jones Industrial Average rose 20 points. S&P 500 futures and Nasdaq 100 futures have hardly changed.
The market staged a two-day recovery rally after the Federal Reserve signaled that there was no imminent lifting of its ultra-loose monetary policy. Investors are also betting that Chinese real estate giant Evergrande's debt crisis will have no impact on global markets.
The blue-chip Dow rose 500 points on Thursday for its best daily performance since July 20. The S&P 500 was up 1.2% while the tech-heavy Nasdaq Composite was up 1%.
The big averages offset the steep losses earlier this week and are well on their way to posting a successful week. The Dow is up 0.5% this week and is well on its way to breaking a three-week losing streak. The S&P 500 is up 0.4% this week and the Nasdaq is up about 0.1%.
Some believe Evergrande will default on bond payments as it is still unclear whether the developer was able to pay $ 83 million in interest on a U.S. dollar bond due Thursday. Bloomberg News reported that state regulators have directed Evergrande to avoid short-term dollar bond defaults. Bondholders could also consider a grace period of 30 days. Whatever the outcome, investors appear to be hoping the impact on Wall Street will be contained.
"If Evergrande fails, exposure outside of China seems limited and as the government will do whatever it takes to contain it," said Edward Moya, senior market analyst at Oanda. "If China is successful, global risk-taking may not be affected as much."
On Wednesday, the Fed said that tapering its monthly bond buying program "may soon be warranted," but it did not provide an exact timetable for when it could begin moderating its purchases.
"While we are nowhere near the end of quantitative easing and interest rates near zero, the tide seems to be changing," said Anu Gaggar, global investment strategist with the Commonwealth Financial Network. "So far, the market has welcomed bad news as good news, but a market that responds to signs of an economy that can operate on its own without monetary crutches is a refreshing change."
Nike stock fell 2.5% in expanded trading Thursday after the sneaker giant reported quarterly sales that fell short of analysts' expectations due to falling demand in North America.