Stock Futures Rise as Investors Optimistic about Fed’s Interest Rate Policy
Traders on the New York Stock Exchange saw stock futures inching up on Wednesday, as hope mounts that the Federal Reserve will cease raising benchmark interest rates.
Futures linked to the Dow Jones Industrial Average edged higher by 58 points or 0.2%, while S&P 500 futures and Nasdaq 100 futures added about 0.1%.
In after-hours trading on Tuesday, Las Vegas Sands shares slipped by more than 4% following the announcement that the casino operator’s largest shareholder, Miriam Adelson, would sell $2 billion in shares. Conversely, NetApp saw a significant 11% surge after issuing positive earnings guidance and surpassing analysts’ expectations in the latest quarter.
During regular trading, the S&P 500 advanced 0.1%, the Nasdaq Composite added around 0.3%, and the Dow inched higher by 0.2%.
Federal Reserve Governor Christopher Waller’s statement on Tuesday that current monetary policy appears to be sufficiently restrictive and could cool inflation back down to the central bank’s 2% target fueled investor optimism and buoyed stocks.
Vital Knowledge founder and president Adam Crisafulli said on CNBC’s “Closing Bell: Overtime” on Tuesday, “Markets are already far ahead of where Waller shifted the Fed to.” He added, “Now it’s just a question: Is the Fed going to start pushing back aggressively again about rate cuts that are expected for next year, and I think there’s a lot of important economic data we’ll get between now and the next meeting. I think investors are just waiting to see clarity on that front.”
Indeed, fed funds futures pricing suggests a chance that the central bank could cut rates as early as next spring, according to the CME FedWatch Tool.
On Wednesday, traders will be keeping an eye out for second preliminary gross domestic product data for the third quarter, as well as the wholesale inventories report for October. Before the opening bell, Hormel Foods and Dollar Tree are expected to issue quarterly results, with Salesforce to post earnings after the close.