Traders at the New York Stock Exchange (NYSE) are feeling apprehensive as stock futures fell on Thursday, September 20th, 2023. Investors are concerned about the possibility of another rate hike by the Federal Reserve before the end of the year.
Futures linked to the Dow Jones Industrial Average experienced a decline of 93 points, representing a 0.3% drop. S&P 500 futures also lost 0.4%, while Nasdaq 100 futures slid by 0.6%.
Although homebuilder KB Home exceeded Wall Street’s expectations in terms of both revenue and profit, its stocks fell by 2%. Additionally, marketing automation firm Klaviyo, which made its debut on the public market the previous day, slipped nearly 2% in premarket trading on Thursday.
However, delivery company FedEx managed to buck the negative trend as its stocks gained 5%. This was fueled by the company’s adjusted earnings of $4.55 per share in its fiscal first quarter, surpassing analysts’ expectations of $3.73 per share.
These movements in the stock market followed a gloomy Wednesday session. The three major averages closed at session lows after the Federal Reserve announced that it would not change interest rates, but predicted another rate hike later this year. Fed Chair Jerome Powell emphasized the possibility of a soft landing for the economy, although it was not his baseline scenario.
Jimmy Chang, the chief investment officer at Rockefeller Global Family Office, commented on the surprise optimism expressed by the Fed regarding the economic outlook. Chang highlighted the upward revision on GDP growth for 2023 and mentioned that it felt like they were projecting a “goldilocks soft landing” scenario. He also stressed the importance of the 10-year Treasury yield as an economic indicator and its potential impact on the banking system. During Wednesday’s session, the 10-year note reached levels not seen since November 2007, and on Thursday, the benchmark 10-year rate hit a fresh multiyear high.
Traders are now awaiting additional economic data on Thursday. This includes the release of weekly jobless claims before the opening bell, as well as existing home sales data later in the morning.