S&P 500 Futures track Wall Street gains on optimism over US debt ceiling vote, Sino-American ties

  • S&P 500 Futures refresh intraday top amid upbeat market sentiment, ignores firmer US Treasury yields.
  • US policymakers inching closer to debt ceiling extension, a vote is scheduled on Thursday.
  • Hopes of improvement in the US-China relations gain momentum despite mixed signals.
  • US Senate updates, jobless claims may entertain traders ahead of NFP.

S&P 500 Futures portray a risk-on mood with half a percent upside to refresh the intraday top with 4,376 during early Thursday. In doing so, the stock derivative follows Wall Street performance amid positive headlines from US politics, as well as on the Sino-American front.

US Senate Republican Leader Mitch McConnell’s support to the short-term extension of the US debt ceiling becomes the key positive for the risk appetite of late. The policymakers are up for voting on Thursday. Given the Democrats’ push for the agreement and McConnell’s recent shift, the vote may have more assents and can favor the risk-on mood on passing.

It’s worth noting, however, that some on the floor still doubt the passage as Republicans don’t like the Democratic proposals for stimulus and hence it will be an interesting political play going forward.

On the different page, Beijing-based media relies on the latest communications between US President Joe Biden and his Chinese counterpart Xi Jinping to cite the improvement in the US-China ties. Biden and Xi Jinping previously respected the Taiwan agreement and chatters are also loud that they meet, virtually, by the year-end. Furthermore, the US also considered exclusion request for China imports, which is under public preview.

On the contrary, Secretary of State Antony Blinken’s dislike for China’s action over the Taiwan issue and a push to act responsibly in the matters relating to Evergrande probe the optimists.

It’s worth noting that a three-month high US ADP Employment Change fuel hopes for a firmer US Nonfarm Payrolls (NFP), up for publishing on Friday, as well as Fed tapering. This in turn helps the US Treasury yields to stay firmer and put a carpet under the US Dollar Index (DXY), not to forget challenging equities.

Looking forward, China’s absence and a light calendar may bore traders in Asia but the weekly prints of US Jobless Claims and the voting on the US debt filibuster will be important to watch going forward.

Read: Wall Street Close: Stocks recover amid US debt ceiling extension chatters