A trader works on the trading floor of the New York Stock Exchange after the Federal Reserve interest rate announcement on September 18, 2024.
Andrew Kelly | Reuters
U.S. stock futures rose early Thursday as traders digested the Federal Reserve’s earlier decision to cut interest rates by half a percentage point.
Dow Jones Industrial Average Futures It rose 259 points, or 0.6%. Futures linked to the S&P 500 Index rose about 1%, while Nasdaq 100 Index Futures rose 1.4%.
On Wednesday, the Federal Reserve lowered its overnight lending rate to 4.75% to 5.00% from 5.25% to 5.5%, surprising some investors who had criticized the magnitude of the first rate cut. This is the first time in four years that the Federal Reserve has cut interest rates.
After a volatile session that lasted much of the afternoon, stocks ended lower on Wednesday. both S&P 500 Index and 30 in stock Dow Chemical The stock initially rose to a record high after the Federal Reserve announced its decision to cut interest rates.
Tom Porcelli, chief U.S. economist for fixed income at PGIM, attributed Wednesday’s market decline to Powell’s emphasis that an initial 50 basis point cut would not lay the groundwork for further significant rate cuts later.
“The market is thinking to itself, ‘If you go for 50, then the other 50 is very likely.’ But I think he did break that idea to some extent, which is not to say that he doesn’t think it can happen, but It’s that he didn’t pre-commit that it was the right decision.
Darden Restaurantshipping giant fedex and home builders Lenard Earnings are due Thursday. Traders will also be watching August existing home sales and the latest weekly unemployment claims.
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