Holiday-thinned activity causes US stock futures to surge

U.S. stock index futures edged higher in light trading on Thursday evening, with Wall Street hovering near record levels due to optimism over robust U.S. economic performance and lower interest rates.

Sentiment was bolstered by reports suggesting U.S. trade tariffs on China might not be as harsh as previously anticipated, fueling hopes of a less intense trade war between the world’s two largest economies.

Investors largely maintained expectations of another Federal Reserve rate cut in December, despite uncertainties surrounding persistent inflation and the potential for expansionary policies under President-elect Donald Trump.

Geopolitical tensions, including the escalating conflict between Russia and Ukraine and renewed accusations between Israel and Hezbollah over a recently established ceasefire, appeared to have limited impact on markets.

By 7:04 PM ET (12:04 AM GMT), S&P 500 Futures gained 0.2% to reach 6,028.0 points, Nasdaq 100 Futures climbed 0.3% to 20,877.75 points, and Dow Jones Futures rose 0.2% to 44,931.0 points.

Wall Street Nears Record Highs as November Wraps Up

Wall Street indexes have experienced some recent declines, particularly with technology stocks facing pressure from weak earnings and increased regulatory scrutiny.

However, strong buying interest in economically sensitive sectors has kept benchmarks close to record highs. Investors have also been positioning for the potential economic impact of expansionary policies under Trump.

For November, the S&P 500, NASDAQ Composite, and Dow Jones Industrial Average recorded gains between 5% and 7%, with the Dow leading the charge. The rally followed Trump’s election victory, which spurred optimism in the markets.

Wall Street will have a shortened trading session on Friday.

Fed Signals Awaited Ahead of December Meeting

In the coming week, markets will focus on speeches from several Federal Reserve officials, including Chair Jerome Powell on Wednesday, to gather insights on the central bank’s rate outlook.

Despite signs of persistent inflation and a resilient labor market, investors continue to anticipate a 25 basis point rate cut in December, which would mark 100 basis points of easing by the Fed in 2024.

However, recent remarks from central bank officials have indicated a cautious stance, raising concerns that the Fed could slow the pace of rate reductions in 2025. Stubborn inflation may also push the Fed toward a higher terminal rate in its current policy cycle.

The Fed’s final meeting of the year is scheduled for December 17-18.

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.