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US pre-open: Futures point to more losses following Fed rate cut

By Iain Gilbert

Date: Thursday 19 Sep 2019

US pre-open: Futures point to more losses following Fed rate cut

(Sharecast News) - US futures were pointing to a weak open on Thursday as investors continued to react to the Federal Reserve's latest policy announcement.
As of 1200 BST, Dow futures were down 0.25%, while S&P 500 and Nasdaq futures had the indices opening 0.24% and 0.38% weaker, respectively.

Stocks closed in a mixed state on Wednesday after the US central bank cut its main policy rate a further 25 basis points, with several of its top officials believing that it would need to be lowered again before the year was out.

In his post-meeting press conference, Fed chairman Jerome Powell said that the central bank was prepared to move "forcefully" if necessary.

Oanda analyst Craig Elam said: "Everything feels a little flat in the markets after the Fed left investors deflated and frustrated, despite delivering the 25 basis point rate cut they demanded."

Erlam said the Fed had chosen to be "reactive rather than proactive", meaning forward guidance was more focused on being committed to doing what's necessary, rather than actually guiding on rates.

"While investors may be frustrated about this, it's probably not the worst approach as we don't know how long the trade war will last, how much worse it will get and what the full consequences will be. That's a lot of unknowns and if it is resolved over the next couple of months, it would dramatically change the outlook and the path of interest rates."

Elsewhere, market participants will keep a keen eye on a new round of face-to-face talks between Chinese and US officials in Washington later in the day.

On the data front, initial jobless claims will be posted at 1330 BST, while existing home sales for August will be out at 1500 BST.

In corporate news, Darden Restaurants and Scholastic were both scheduled to release their latest quarterly figures throughout the course of the day.

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