Traders work on the floor of the New York Stock Exchange.
Stock futures were flat on Wednesday as Wall Street appeared range-bound near its record levels.
Futures on the Dow Jones Industrial Average were lower by 29 points. S&P 500 futures were essentially flat. Nasdaq 100 futures gained 0.1%.
Trading was quiet in the premarket though reopening plays like Carnival Corp. and American Airlines were slightly higher in early trading.
Meme stock mania was set to continue Wednesday with day traders now focusing their attention on Clover Health. The stock was up another 18% in premarket trading following an 85% rally on Tuesday amid explosive trading volumes. Wendy’s, another name popular among Reddit traders, gained 25% Tuesday and was higher again in premarket trading Wednesday.
The S&P 500 and the blue-chip Dow both closed near the flatline on Tuesday. The broad equity benchmark is now just 0.3% below its record high of 4,238.04 reached on May 7. Investors await the next reading on inflation to gauge if higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.
“US stocks have largely been stuck in a range since mid-April and don’t seem likely to be breaking out anytime soon,” Edward Moya, senior market analyst at Oanda, said in a note. “Investors want to see how hot pricing pressures get and how much downside in equities will occur once the Fed’s taper tantrum begins.”
The consumer price index for May is set to be released Thursday. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.
Many on Wall Street believe the latest meme stock episode should stay contained to a handful of names, unlike the GameStop trading frenzy in January that had an impact on the broader stock market.
“Given the low risk of a broad contagion, we view the fallout of the recent short squeeze to be
limited,” Maneesh Deshpande, global head of equity derivatives strategy at Barclays, said in a note. “The current short squeeze is more localized probably because the number of stocks with high short interest has come down dramatically.”
On the data front, job openings in April soared to a new record high, with 9.3 million vacancies coming online amid the economic recovery.