Good morning, traders!
The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it…
U.S. stock futures saw a slight recovery in premarket trading on Thursday, following its most significant downturn since September. This shift occurred after the Federal Reserve signaled that interest rate cuts were not on the horizon. The S&P 500 futures saw a 0.4% increase, while the Dow Jones Industrial Average futures rose by 0.1%. The Federal Reserve’s decision to maintain its main interest rate comes amid efforts to ensure inflation moves sustainably towards its 2% goal, with Fed Chair Jerome Powell emphasizing the need for greater confidence in inflation’s downward trajectory.
Fed Chair Jerome Powell sought to clarify the central bank’s stance on economic growth and inflation, emphasizing the desire for a strong labor market without necessitating a weakening to achieve inflation targets. Despite anticipations of economic slowdowns due to Fed’s inflation control measures, recent data suggests a resilient economy, with GDP growth and a stable unemployment rate defying recession expectations. Powell’s comments underscore the Fed’s cautious optimism and its commitment to achieving inflation targets without hindering economic growth.
The bond market saw fluctuations in Treasury yields following the Fed’s announcement, reacting to softer-than-expected economic reports. Additionally, recent U.S. data indicated a slower growth in pay and benefits for workers in the last quarter of 2023, potentially easing one of the Fed’s major concerns about wage-driven inflation. Meanwhile, the technology sector faced a sharp decline, with significant losses in big tech stocks such as Alphabet, Microsoft, and Tesla, contributing to a broader market downturn.
In global markets, Asian stocks showed mixed results, with Hong Kong’s Hang Seng making modest gains and Tokyo’s Nikkei 225 experiencing a decline. India announced a short-term budget focusing on construction and housing for the poor, aiming to reduce the government’s deficit ahead of national elections. These developments highlight the interconnected nature of global financial markets and the influence of government policies on economic indicators.
Thursday Economic Events:
Challenger Job Cuts 7:30am ET
Jobless Claims 8:30am ET – High Volatility Expected
Productivity and Costs 8:30am ET
PMI MFG Final 9:45am ET – High Volatility Expected
ISM MFG Index 10:00am ET – High Volatility Expected
Construction Spending 10:00am ET
EIA Natural Gas Report 10:30am ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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