U.S. stocks look set for a relief rally after the market failed to sustain the upward momentum set in motion by the 50 basis-point cut announced by the Federal Reserve on Wednesday. The index futures point to a sharply higher opening on Thursday. Given the central bank’s focus on labor market statistics, traders may closely monitor the weekly jobless claims data. The results of a regional manufacturing survey and the Conference Board’s leading economic index may also create some ripples in the market.
With the Fed decision on the back-burner, earnings could get back to the spotlight, with FedEx Corp. (NYSE:FDX) due to report after the close. Tech and small-cap stocks remain poised to rally out of the gates even as most strategists warn of a tech rally cool-off. Volatility is on the wane amid the risk-on mood, with the CBOE Volatility Index, aka VIX, down about 9%.
Futures
Performance (+/-)
Nasdaq 100
+1.99%
S&P 500
+1.53%
Dow
+1.15%
R2K
+2.88%
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) jumped 1.55% to $570.08 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 2.00% to $480.96, according to Benzinga Pro data.
Cues From Last Session:
Wall Street closed Wednesday’s session modestly lower despite the Fed obliging with the magnitude of the cut the market was hoping for. The major indices resigned themselves to the pattern typical of a Fed decision day and moved sideways until the announcement was made. The central bank delivered and traders indulged in strong buying that took the S&P 500 Index to a new intraday high.
The dot plot suggested policymakers will likely cut rates a 25 basis points at each of the next two decisions and by at least another percentage point in 2025. While the growth outlook was left unchanged, the unemployment rate forecasts were revised. But Fed Chair Jerome Powell’s cautious comments at the press conference spooked the market, sending stocks lower in late-afternoon trading.
Index
Performance (+/)
Value
Nasdaq Composite
-0.31%
17,573.30
S&P 500 Index
-0.29%
5,618.26
Dow Industrials
-0.25%
41,503.10
Russell 2000
+0.04%
2,206.34
Insights From Analysts:
It could be time for defensives and small-caps to shine, now that the rate-cutting ...
