U.S. stock futures showed a positive uptick on Thursday morning, driven by the Federal Reserve’s indication of multiple rate cuts in 2024, which resulted in the Dow Jones Industrial Average closing at an all-time high.
Futures tied to the 30-stock Dow saw an increase of 125 points or 0.34%. Additionally, S&P 500 futures and Nasdaq 100 futures rose by 0.4% and 0.5%, respectively.
As expected by Wall Street, the Federal Open Market Committee maintained interest rates within the range of 5.25% and 5.5%. However, market sentiment improved after policymakers outlined plans for three rate cuts in the upcoming year.
During the regular trading session, the Dow recorded a 1.4% surge, closing at a milestone level of 37,090.24. This was the first time the index exceeded the 37,000 mark and surpassed its previous closing high from January 2022. Moreover, the S&P 500 climbed by 1.37% to surpass the 4,700 benchmark for the first time since January 2022, while the Nasdaq Composite saw a 1.38% increase. All three major indices reached new 52-week highs.
Ross Mayfield, an investment strategy analyst at Baird, believes that the Federal Reserve’s commentary acknowledges a path leading to a soft landing. Mayfield expects policy easing in 2024 to potentially exceed market expectations, justifying the recent rally in the market over the past six weeks, following Federal Reserve Chair Jerome Powell’s comments.
Mayfield noted, “We’re basically priced for perfection. We’re probably at a point where risks are skewed a little bit to the downside in 2024, but a soft landing is certainly in the cards, and the Fed’s acknowledgement today does help justify the move in equities.”
In extended trading on Wednesday, shares of Adobe experienced a decline of over 4% due to muted guidance for earnings and revenue in 2024.
Source (CNBC)
