Stocks set for positive open
U.S. stock futures were trading higher ahead of the opening bell on Wednesday as Wall Street looked to bounce back from the heavy losses recorded in the previous session.
At around 5:35 a.m. ET, futures tied to the Dow Jones Industrial Average pointed to gains of 197 points, or 0.58%, to 34,372. S&P 500 futures rose 28.50 points, or 0.66%, to 4,372 while the tech-heavy Nasdaq 100 futures advanced 121.75 points, or 0.82%, to 14,886.50.
On Wednesday, the Dow declined 569.38 points, or 1.63% to 34,299.99, while the S&P 500 fell 90.48 points, or 2.04% and the Nasdaq Composite lost 423.29 points, or 2.83%.
The Dow’s dive, its biggest one-day point loss for the benchmark U.S. index since May, came as treasury yields rose their highest level in months.
Janet Yellen warns U.S. Treasury will run out of cash by mid-October
Meanwhile, U.S. Treasury Secretary Janet Yellen has warned Washington lawmakers that they must raise the debt limit by Oct. 18 or a government default will be triggered.
Speaking at a Senate Banking Committee hearing where she appeared alongside the Federal Reserve chairman Jerome Powell, Yellen cautioned lawmakers that inaction could lead to a self-inflicted economic recession and a financial crisis.
She called for bipartisan action on the issue and cautioned that if no deal is reached to suspend or raise the debt limit, it would be the first time in history that America defaults on its debt and would be a disaster.
Powell, in his testimony, said the U.S. economy is still not close to hitting its maximum employment target. He also told lawmakers that he agreed with Yellen’s warning that there would be devastating consequences should the U.S. default on its debt.
Yellen and Powell are both set to testify again, on Thursday, this time before the House of Representatives Committee on Financial Services.
Evergrande to sell stake in Shengjing Bank, worth $1.5 billion
Elsewhere, China Evergrande Group has announced it is selling a $1.5 billion stake it owns in Shengjing Bank, as it rushes to raise funds owed to local investors, suppliers, and homebuyers.
The cash-strapped property giant will sell the almost 20% stake to state-owned Shenjing Finance Investment Group, according to a Reuters report. Proceeds of the sale will be used to settle a debt the group owes to Shengjing Bank, as per the report.
Evergrande defaulted on a bond interest payment last week and is also facing a deadline for another bond interest payment of $47.5 million due on Wednesday.
