S&P 500 Futures Rise as Fed Signals Unlikelihood of March Rate Cut
In a surprising turn of events, S&P 500 futures experienced a rise on Wednesday night following a dismal day for the major averages. This comes after the Federal Reserve held steady on rates but signaled that a rate cut in March is unlikely. Futures linked to the broad-market index and Nasdaq 100 futures saw increases of 0.18% and 0.37%, respectively, while Dow Jones Industrial Average futures were higher by 27 points, or 0.07%.
The positive movement in futures came after a disappointing session for Wall Street. The Dow Jones Industrial Average fell 317 points, or 0.8%, marking its worst day since December. The S&P 500 also slid 1.6%, experiencing its worst day since September, and the Nasdaq Composite lost 2.2%, its worst session since October.
The decline in the major averages can be attributed to Federal Reserve Chairman Jerome Powell’s comments during his post-meeting conference. Powell discouraged investor hopes for a rate cut as soon as March, which sent equities tumbling. Liz Young, head of investment strategy at SoFi, expressed her interpretation of Powell’s message on CNBC’s “Closing Bell,” stating, “I think what he told us today was you haven’t been listening… He has not changed his tune on that. The market continued to try to bully him into a different position. And today, he said, ‘I will not be bullied. We call the shots.'”
Despite the recent losses, the major averages closed out January on a positive note, with each of the major indexes up more than 1% for the month. This indicates that there is still optimism in the market despite the recent setback.
Looking ahead, investors will be closely monitoring several economic indicators. Weekly jobless claims, the ISM manufacturing index, and construction spending reports are set to be released on Thursday. Additionally, the highly anticipated January jobs report is scheduled for release on Friday. These reports will provide further insight into the state of the economy and potentially impact market sentiment.
In terms of corporate earnings, Merck, Peloton Interactive, and Royal Caribbean are among the companies reporting their latest results on Thursday before the market opens. The performance of these companies will be closely watched by investors as they seek to gauge the health of various sectors. Furthermore, mega-cap tech stocks Amazon, Apple, and Meta Platforms are set to report their earnings after the market closes, adding to the anticipation surrounding the tech sector.
Overall, while the recent session was challenging for Wall Street, the positive movement in S&P 500 futures provides a glimmer of hope for investors. The Federal Reserve’s indication that a rate cut in March is unlikely may have initially disappointed some market participants, but it also demonstrates the central bank’s commitment to maintaining stability. As economic indicators and corporate earnings reports continue to be released, investors will be closely monitoring the data to make informed decisions about their portfolios.