Stock futures climb higher
U.S. stock futures traded higher on Monday morning after Federal Reserve Chairman Jerome Powell expressed optimism that the economy might begin to bounce back this year from the COVID-19 crisis.
Powell told CBS’ “60 Minutes” on Sunday night that he is highly confident the American economy will claw its way back from COVID-19, but warned that it may not fully recover until a vaccine is found.
“This economy will recover…We’ll get through this. It may take a while. It may take a period of time. It could stretch through the end of next year. We really don’t know. We hope that it will be shorter than that, but no one really knows,” Powell said. “In the long run and even in the medium run, you wouldn’t want to bet against the American economy. The American economy will recover.”
He added that even though the recovery may take a while, the Fed has more tools it could use to prop the economy. “We’re not out of ammunition by any shot. There’s almost no limit to what we can do with these lending programs,” he said, referring to the central bank’s emergency lending authority.
By 6:00 a.m. ET, futures tied to the blue-chip Dow indicated a gain of 344 points, or 1.46% to 23,861. S&P 500 futures rose 41.62 points, or 1.46% to 2,888.12 while the tech-heavy Nasdaq 100 futures were up 113 points, or 1.24% to 9,209.5.
Crude futures surge past $30 a barrel
Crude futures also extended gains this morning to rise to their highest level in more than a month, thanks to signs of gradual recovery in demand as economies emerge from monthslong shutdowns and ongoing production cuts.
As of 6:00 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures for June delivery were at $31.41, up by $1.89 per barrel, or 6.4% from its close on May 15. WTI crude futures last settled above $30 per barrel on March 13. International Brent crude futures were up $1.68 a barrel, or 5.17% to $34.18.
U.S.-Huawei dispute deepens
Meanwhile, China’s commerce ministry has vowed to “take all necessary measures” to safeguard the interests of Chinese enterprises after the Trump administration issued new guidelines that will force global chipmakers that depend on American technology to acquire a U.S. certificate to design or produce chips for the Chinese tech giant or its entities.
“The U.S. uses state power, under the so-called excuse of national security, and abuses export control measures to continuously oppress and contain specific enterprises of other countries,” the ministry said.
The new guidelines issued last week will go into effect later this year and are aimed at causing further damage on Huawei, which the U.S. government has labeled a threat to national security.
Overnight, the Nikkei Asian Review reported citing sources that Taiwan Semiconductor Manufacturing Co., the world’s largest contract semiconductor has halted new orders from Huawei in response to the guidelines.
