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Dow futures march higher as investors wait for the private sector job report

US stock index futures pointed to further gains on Wednesday after the stock market closed at its highest level since early March.

How do benchmarks work?

Futures for the Dow Jones industrial average
+ 0.49%

+ 0.49%

increased by 109 points, or 0.4%, at 25,810, those for the S&P 500 index
+ 0.36%

+ 0.36%

traded 9.10 points, or 0.3%, higher to 3,086.25, while the Nasdaq-100 futures
+ 0.25%

+ 0.25%

gained 22.25 points to reach 9,670, an increase of 0.2%.

On Tuesday, Dow
+ 1.05%

rose 267.63 points, or 1.1%, to finish at 25,742.65, which is the highest ending since March 6, according to Dow Jones Market Data. At the same time the S&P 500 index
+ 0.82%

rose 25.09 points, or 0.8%, closed at 3,080.82, its highest finish since March 4, and the Nasdaq Composite Index
+ 0.59%

advanced 56.33 points, or 0.6%, to finish at 9,608.37, representing its best closing level since February 20.

What drives the market?

The markets have climbed on a virtual wall of concern to get higher in recent sessions, rising from social strife and violent demonstrations in major cities, testimonies between the US and China and the economic massacre carried out by a viral pandemic.

On Wednesday, investors will read through the impact of efforts to limit the spread of COVID-19, with a private sector employment report likely showing that 8,663 million jobs were lost in May, according to Econoday, compared to Automatic Data Processing Inc.
+ 1.85%

estimate in April for a loss of 20,236 million. The data, which will be released at 8:15 pm Eastern, will be in front of the closely monitored Department of Labor report which will be released on Friday.

Markets have previously ignored cutting-edge economic news and a wave of protests over American cities caused by George Floyd’s death in Minneapolis last week – an unarmed black man who died under the knee of a white police officer. Protests of social injustice in America have resulted in curfews imposed in a number of cities, including New York.

“Social unrest continues throughout the United States and results in New York, known as ‘The City That Never Sleeps’, and introduced an eight hour curfew today, a full 22 minutes before sunset,” BTIG analyst Julian Emanuel and Michael Chu wrote in a research note on Tuesday.

The current strain of civil unrest that is playing out in America has made comparisons with social justice protests in 1968, but BTIG analysts note that the weakening state of the economy due to the fall from the viral outbreak is making the situation worse. “GDP growth in 1968 was 4.8%, 2020’s GDP is expected to be -5.8%,” the analysts wrote.

The hope of success in resumption of companies has been given credit for pushing the shares higher, but analysts say that a never-before-seen dose of stimulus from the Federal Reserve has also created a floor for assets that are considered risky. Weekly data showed that the Fed’s balance sheet rose to $ 7.1 trillion from last Wednesday, up from $ 7.04 trillion in the previous period. Meanwhile, the US government has injected billions of dollars more into small businesses and workers to help prevent the difficulties of closing stores.

In addition to labor market data, investors will look for a report on the service sector from the Institute for Delivery Management at 10:00 and a report on factory orders simultaneously.

Read: My illness, riots and rising tensions in the US-China, the stock market keeps it cool

Which layers are in focus?
  • Zoom Video Communications Inc.
    + 1.92%

    published record sales and results and expectations of more in the midst of the COVID-19 pandemic.

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