Stock futures are on the rise due to a significant drop in Treasury yields. This surge came after the Federal Reserve hinted at the possibility of multiple rate cuts in 2024, driving the Dow Jones Industrial Average to close at a new all-time high.
Dow futures have registered an increase of 86 points, or 0.2%, while S&P 500 futures and Nasdaq 100 futures have risen by 0.2% and 0.3% respectively.
Traders have begun placing bets on rate cuts for 2024, resulting in the 10-year Treasury note yield falling below 4% for the first time since August. Currently, the benchmark rate stands at 3.95%.
On Wednesday, the Dow made a remarkable jump of over 1%, surpassing the 37,000 mark and reaching a new all-time high. This surge was prompted by the Federal Open Market Committee’s indication that they may implement three rate cuts next year.
Bank of America’s chief U.S. economist, Michael Gapen, commented on the Federal Reserve’s stance, stating, “The Fed delivered the dovish pivot that we expected heading into the December meeting. While we did not expect the Fed to move to an outright easing bias, we did expect it to move to a more balanced reaction function and, in the event, we think it did just that.”
Furthermore, the S&P 500 and Nasdaq Composite also achieved fresh 52-week highs on Wednesday. The S&P 500 is inching closer to joining the Dow in record territory, as it is only 2% away from reaching its all-time high closing of 4,796.56, which was last seen in January of 2022. Meanwhile, the Nasdaq has a 9% gap to bridge before it can reach its closing record, and a further 10% to reach its intraday record.
Source (CNBC)
