US pre-open: Futures higher following yesterday's heavy losses
By Iain Gilbert
Date: Thursday 19 Dec 2024
(Sharecast News) - Wall Street futures were in the green ahead of the bell on Thursday after comments from Federal Reserve chairman Jerome Powell led to a major sell-off in the previous session.
As of 1255 GMT, Dow Jones futures were up 0.52%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.59% and 0.53% firmer, respectively.
The Dow closed a whopping 1,123.03 points lower on Wednesday after the Fed chairman adopted a more hawkish stance regarding the future of monetary policy in the US.
While the central bank cut its benchmark overnight lending rate by 25 basis points to a target range of 4.25%-4.50%, Powell indicated that the Federal Reserve was now only likely to cut interest rates twice in 2025 - for a total of just 50 basis points.
Trade Nation's David Morrison said: "While this is what the CME's FedWatch Tool has been forecasting for a some time now, it represents a major change in the FOMC's thinking since the last SEP from September. Back then, the forecast was for 100 basis points worth of cuts in 2025. So this represents a significant hawkish change, and one that led to a slump in equity markets and precious metals, and a surge in the US dollar and bond yields.
"Inflation has ticked up recently, which makes it harder for the Fed to justify easier monetary policy. But US growth is undoubtedly robust, while unemployment appears anchored at manageable levels. There is some uncertainty over what the incoming Trump administration may mean for the economy, but overall, little has changed. The Fed can be blamed for some poor messaging, but then again, investors have only heard what they wanted to hear, blocking out any negative signals. The market hasn't suddenly woken up to a string of 'unknown unknows' or anything else so Rumsfeldian. Instead, the sell-off in equities looks more like a panicked response from a market priced to perfection. And while it shouldn't be a surprise to see a bounce-back as we approach the Christmas break, the odds have certainly shortened on tops being in for all the major indices."
On the macro front, weekly jobless claims data will be out at 1330 GMT, as will Q3 GDP and PCE numbers, and the Philadelphia Fed's manufacturing survey, while existing home sales data will follow at 1500 GMT.
In the corporate space, shares in chipmaker Micron Technology were down double-digits after posting weaker-than-expected Q2 guidance.
Reporting by Iain Gilbert at Sharecast.com
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