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U.S. stock futures mostly higher as investors attempt to shake off tax jitters

U.S. stock-index futures ticked higher Friday as investors looked ahead to data on activity in the manufacturing and services sectors a day after equities stumbled following reports President Joe Biden would propose a large increase on the capital-gains tax for the wealthiest Americans.

A busy week of corporate earnings reports is also coming to a close.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average
    YM00
    fell 30 points, or 0.1%, to 33,679.

  • S&P 500 futures
    ES00
    were up 4.55 points, or 0.1%, at 4,132.25

  • Nasdaq-100 futures
    NQ00
    rose 23.75 points, or 0.2%, to 13,774.

On Thursday, the Dow
DJIA
tumbled 321.40 points, or 0.9%, for its biggest one-day fall since March 4, while the S&P 500
SPX
and Nasdaq Composite
COMP
also fell 0.9%.

What’s driving the market?

Stock index futures suggest some recovery Friday, to end a down week for the market, after stocks turned south in early afternoon trade Thursday when Bloomberg News and others reported that Biden would propose a hike in the capital-gains tax rate to 39.6% from 20% for individuals making more than $1 million a year. While the reports dented sentiment, analysts noted that the proposal was in line with Biden’s campaign promises and noted expectations a hike would be scaled back in congressional negotiations.

Need to Know: Get ready for $178 billion of selling ahead of the capital-gains tax hike. These are the stocks most at risk

“The 39.6% figure is very much in line with the campaign pledge and shouldn’t shock, but the fact we’ve seen selling of risk suggests the market is far more sensitive to bad news, and this will happen when froth is prevalent,” said Chris Weston, head of research at Pepperstone, in a note.

“Consolidation seems to the order here in the short-term and it feels like we’re at the mercy of a period of choppy price action,” he said.

TaxWatch: Biden has pledged to tax the rich — but precisely how will he do that? Experts consider his options

Markit’s U.S. manufacturing and services purchasing managers index readings for April are due at 9:45 a.m. Eastern. Economists expect the manufacturing gauge to rise to 60.5 from 59.1, while the services index is expected to rise to 61.0 from 60.4. A reading of more than 50 indicates an expansion in activity.

March new-home sales figures are set for release at 10 a.m. Eastern and are expected to rise to an 888,000 seasonally adjusted annual rate from 775,000 in February.

Which companies are in focus?
What are other markets doing?
  • The yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    fell 2.4 basis points to 1.537%. Yields and bond prices move in opposite directions.

  • The ICE U.S. Dollar Index
    DXY,
    a measure of the currency against a basket of six major rivals, fell 0.4%.

  • Bitcoin
    BTCUSD
    fell sharply in a move that some observers tied to tax jitters, with the digital asset falling below $50,000.

  • Oil futures edged lower, with the U.S. benchmark
    CL00
    off 0.1% at $61.37 a barrel.

  • Gold futures edged higher, with the June contract
    GCM21
    up 0.7% at $1,794.80 an ounce.

  • In Europe, the Stoxx 600 index
    XX:SXXP
    and London’s FTSE 100
    UK:UKX
    was were both down 0.6%.

  • In Asia, the Shanghai Composite
    CN:SHCOMP
    rose 0.3%, Hong Kong’s Hang Seng Index
    HK:HSI
    jumped 1.1% and Japan’s Nikkei 225
    JP:NIK
    fell 0.6%.

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