U.S. stock futures saw a positive start on Thursday following a notable drop in Treasury yields, driven by the Federal Reserve’s indication of multiple rate cuts in 2024. As a result, the Dow Jones Industrial Average soared to a new record-high close.
Dow futures registered a gain of 125 points, equivalent to 0.3%. Similarly, S&P 500 futures and Nasdaq 100 futures recorded increases of 0.3% and 0.4% respectively.
Traders’ predictions of rate cuts in 2024 led to the 10-year Treasury note yield dipping below 4% for the first time since August. The benchmark rate currently stands at 3.95%.
Following the Federal Open Market Committee’s suggestion of potential rate cuts three times next year, the Dow experienced a significant surge of over 1% to surpass the 37,000 milestone.
Ross Mayfield, an investment strategy analyst at Baird, viewed the Federal Reserve’s commentary as a positive sign indicating a potential soft landing for the market. Mayfield stated, “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.”
On Wednesday, the S&P 500 and Nasdaq Composite also achieved fresh 52-week highs. The S&P is currently only 2% away from reaching its highest ever close of 4,796.56, attained in January 2022. Meanwhile, the Nasdaq, with a remaining 9% distance to reach its closing record, still has 10% to go before hitting its intraday record.
Source (CNBC)
