US stocks seesaw in wake of Yellen boost
U.S. stock index futures were mixed after stocks surged Tuesday on the reassurances of Federal Reserve Chair Janet Yellen, who said the Fed would continue the central bank's policy of providing monetary stimulus to bolster the economy.
The Dow Jones Industrial Average rose triple digits and the Nasdaq Composite turned positive for the year on Tuesday, as Yellen defended quantitative easing but made it clear that the Fed was on track to continue tapering and end the $65 billion in monthly purchases.
"What would cause the committee to consider a pause [in tapering] is a notable change in the outlook," she told the House Financial Services Committee, in a debut appearance that was analyzed as "dovish."
"So in all, Yellen appears to be taking a measured approach, warming up investors that tapering is not on autopilot and the Fed could adjust the process if needed whilst also keeping an accommodative policy on interest rates," said Ishaq Saddiqi, a market strategist at ETX Capital, in a morning note.
Futures also look set to respond to happenings on Capital Hill which occurred after Tuesday's close. The House voted to raise the government's borrowing limit until March 2015, without any conditions, bringing to a close the threat of the country defaulting on its debt.
The measure was passed 221 to 201 and was the first debt ceiling increase since 2009 that did not have other legislation tied to it. The political bickering over the U.S. budget and the debt ceiling has been a fixture of politics since the rise of the Tea Party, and had caused last year's government shut down.
European stocks and their Asian counterparts traded higher on Wednesday as investors across the globe cheered Yellen's stance.
There was also better-than-expected Chinese data overnight. Figures showed mainland exports grew 10.6 percent in January from the year previously, compared to a Reuters poll of economists forecasting 2 percent growth.
Investors may also look today at a speech by James Bullard, the president of the Federal Reserve Bank of St. Louis, at 8:30 a.m. Eastern Time. Prior to that at 7:00 a.m. is the latest release of mortgage applications data.
Deere & Co. posted a stronger-than-expected profit as the company's efforts to control costs offset moderating demand from farmers for its tractors, harvesters and other agricultural machinery, Reuters reported.
(Read more: Cost-cutting efforts help Deere earnings beat)