By Caitlin Ostroff 

U.S. stock futures rose on strong earnings and renewed investor enthusiasm for big technology companies.

Futures tied to the tech-heavy Nasdaq-100 led markets, rising 0.4%, indicating the index may climb further after notching its third record high this year on Wednesday. Contracts tied to the broader S&P 500 rose 0.2%, and those linked to the Dow Jones Industrial Average edged up 0.1%.

Railroad operator Union Pacific will post earnings before the opening bell, along with several regional banks, including KeyCorp and Fifth Third Bancorp. Chip giant Intel and International Business Machines are slated to announce quarterly results after markets close.

Investors are watching earnings closely to see if they support the strong run across markets in recent months. Many have bet on an economic recovery this year, as Covid-19 vaccinations ramp up, increasing prospects for future earnings.

"Earnings season looks relatively good and seems to confirm this picture that the U.S. -- because there was no full lockdown -- did well in the fourth quarter," said Carsten Brzeski, ING Groep's global head of macro research. "Stock markets are really looking through the short-term outlook for the economy, which has worsened over recent days."

Investors are paying close attention to company guidance for the sectors most affected by the coronavirus pandemic. In offhours trading, shares of United Airlines fell 2.2% after the airliner said it expected the pandemic to continue to weigh on travel demand this year.

Supporting markets is the expectation that central banks and governments will step in if financial conditions deteriorate. This has encouraged investors to seek out higher returns, including in overseas markets.

Japan's Nikkei 225 Index rose 0.8% Thursday and is trading near its highest level in 30 years. India's benchmark stock gauge, the S&P BSE Sensex Index, hit a record high Wednesday. Indexes in China and South Korea rallied, with the Shanghai Composite up 1.1% and Korea's Kospi rallying 1.5%. Hong Kong's Hang Seng declined 0.1%.

The backstop from governments and central banks -- plus consensus among investors for a strong economic recovery this year -- has squeezed volatility out of the market. The Cboe Volatility Index, known as the Vix and seen as Wall Street's fear gauge, was at 21.44 Thursday, its lowest since December.

A day after President Joe Biden was inaugurated, money managers are keeping a close eye on his proposed $1.9 trillion Covid relief package, and the prospects for it proceeding through Congress.

While stocks have taken their cue from the stimulus plans, investors in bonds have been more skeptical of a big spending push, keeping yields relatively subdued, said Daniel Morris, BNP Paribas Asset Management's chief market strategist.

The yield on the benchmark 10-year Treasury note ticked down to 1.082% Thursday from 1.089% Wednesday. Yields fall when bond prices rise.

"At least one part of the market is saying 'nice idea,' but if you really thought you'd get $1.9 trillion in stimulus, yields would be higher," said Mr. Morris.

Overseas, the pan-continental Stoxx Europe 600 rose 0.4%. Information technology and communication services sectors led gains, while industrials and energy sectors lost ground. Shares of Cellnex Telecom climbed 3.9% for a four-session run of gains and The Sage Group jumped 4.9%.

The European Central Bank is expected to keep policy unchanged after its monetary policy meeting at 7:45 a.m. ET. Investors will be listening to see what ECB President Christine Lagarde says about the euro's rise against the dollar, inflation projections and economic growth, as European nations combat the Covid-19 resurgence.

The U.S. will publish jobless claims for the week ending Jan. 16 at 8:30 a.m. Claims have moved higher in recent weeks, as companies lay off workers amid a surge in Covid-19 cases. Also due at 8:30 a.m., fresh data is expected to show that U.S. housing starts picked up again in December.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

January 21, 2021 05:46 ET (10:46 GMT)