In a bullish turn of events on Thursday, US stock futures surge at market opening as investors reveled in the Federal Reserve’s unexpected shift towards a more dovish stance.
Futures tied to the Dow Jones Industrial Average (^DJI) exhibited a 0.3% gain, paving the way for the blue-chip index to extend its record-breaking ascent beyond 37,000 points achieved just the previous day. Concurrently, S&P 500 (^GSPC) futures marked a 0.6% increase, while Nasdaq 100 (^NDX) contracts surged by 0.4%.
The surge in these indices followed the Federal Reserve’s policy decision, which caught investors off guard with its indication that further interest rate hikes are unlikely. Furthermore, the Fed hinted at the possibility of three rate cuts in the coming year. This unanticipated message was met with enthusiasm from investors, who embraced the Fed’s forecast of a continued decrease in inflation and a stable unemployment rate. As a result, both stocks and bonds experienced a rally, causing the yield on the 10-year Treasury (^TNX) to drop below 4%, a level not seen since August.
Concurrently, oil prices rebounded, climbing approximately 1.7% and distancing themselves from the five-month low witnessed earlier in the week. West Texas Intermediate (CL=F) futures were traded at nearly $71 per barrel, while Brent crude futures (BZ=F) made gains toward $76 per barrel.
While the market celebrated these gains, the upcoming release of reports on initial jobless claims and retail sales could serve as a litmus test, providing insights into the current state of the US economy.
Investors also kept a close eye on central bank decisions globally on Thursday, seeking signs of a coordinated global shift towards easing. The Bank of England maintained its current interest rates, mirroring similar decisions by the Swiss National Bank and the European Central Bank. However, Norway’s policymakers surprised the market by raising the benchmark rate.
In the realm of individual corporations, Adobe (ADBE) faced a setback with its shares plummeting by approximately 5% in premarket trading. The decline was triggered by the software maker’s sales outlook, which suggested a prolonged wait for a boost from new AI tools. Additionally, Adobe disclosed that US antitrust regulators are scrutinizing its subscription cancellation rules.
As the market opens, optimism prevails with a surge in US stock futures, setting the stage for a day of heightened investor confidence and potential gains across various sectors.
Source: Yahoo Finance
