Global Courant
US stock futures rose slowly after the Federal Reserve skipped a rate hike at its meeting that ended Wednesday, but signaled two more rate hikes later this year.
Dow Jones Industrial Average Futures increased by 10 points, or 0.03%. S&P 500 And Nasdaq-100 futures rose 0.1% and 0.15% respectively.
Earlier in the day, the broad market index and the Nasdaq composite both hit their highest levels since April 2022. The S&P 500 closed the day up 0.08%. The index posted its fifth consecutive positive session and its longest winning streak since November 2021. The Nasdaq rose 0.39%, while the Dow Jones Industrial Average decreased by 0.68%.
Fed Chairman Jerome Powell said at a press conference after the meeting that the Federal Open Market Committee would use the six weeks until its next meeting to “consider the cumulative tightening of monetary policy.” He added that no decision has yet been made on the July policy change.
“The Fed shocked the markets today — not by raising rates (because they kept them constant as expected), but because they were much more aggressive than expected in their language and economic forecasts,” said Chris Zaccarelli, chief investment officer of Independent. Advisor Alliance. He added that the initial market shock was quickly shrugged off, with the large averages returning previous losses before the end of Powell’s press conference.
“While this policy decision indicates that the Fed has moved from the escalation phase of the interest rate cycle to the calibration phase, there is no doubt that the Fed is fully prepared to raise rates further in the future if necessary,” said Marty Green, director at Polunsky. Chisel Green.
“But we should expect their moves from here to be more intermittent and in smaller quarter-point increments based on data indicating more restrictive interest rates are warranted,” Green added.
Additional economic data releases Thursday morning will give investors and policymakers better insight into the strength of the labor market and consumer spending. Weekly jobless claims and retail sales for May will be released tomorrow morning. Investors will also be keeping an eye on the Philadelphia Fed’s manufacturing survey in June, as well as the Fed’s industrial production and capacity utilization data in May.
Wall Street looks at a handful of corporate earnings. Kroger, Jabil and John Wiley will report earnings Thursday morning, while Adobe will report after the close.
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