US stock futures steady as markets digest Fed rate cut, Trump 2.0

U.S. stock index futures steadied in evening deals on Thursday after a second day of record highs on Wall Street, as markets digested the Federal Reserve’s outlook on future rate cuts.

Wall Street remained heady after Donald Trump won the 2024 presidential election earlier this week, opening the door for more potentially expansionary policies in the coming years. 

A drop in the dollar and Treasury yields benefited markets, as did a swathe of positive earnings. 

S&P 500 Futures steadied at 6,006.0 points, while Nasdaq 100 Futures fell slightly to 21,216.25 points by 18:20 ET (23:20 GMT). Dow Jones Futures were flat at 43,933.0 points.  Fed cuts rates by 25 bps, flags cautious outlook on future easing

The Fed cut its benchmark rate by 25 basis points to a range of 4.5% to 4.75% on Thursday, as widely expected.

Fed Chair Jerome Powell said the results of the presidential election would have no near-term impact on monetary policy.

But Powell reiterated that the Fed will maintain a data-driven approach to further easing, although he did note that inflation was cooling in line with the Fed’s outlook, while economic growth remained healthy. 

Powell also said that he would serve as the Fed chief until the end of his term in 2026. 

Powell’s comments on the economy offered some bullish cues to markets, helping quell concerns over a slowdown in growth in the coming months. But it still remained unclear just how much further interest rates will fall, and what a neutral rate will look like, although Powell had earlier said the neutral rate would be relatively higher. 

Traders were seen pricing in a 76.1% chance the Fed will cut rates by another 25 basis points in December, and a 23.9% chance rates will remain unchanged, CME Fedwatch showed.  Wall St extends gains after Trump victory 

Wall Street indexes were mostly upbeat on Thursday, extending recent gains after Trump’s victory sparked a rally earlier in the week.

The S&P 500 rose 0.7% to a record high of 5,973.10 points, while the NASDAQ Composite rose 1.5% to a record high of 19,269.36 points. The Dow Jones Industrial Average lagged, ending flat at 43,729.34 points, although it remained in sight of a record high.

Trump’s victory came amid signs of a Republican sweep of both levels of Congress, presenting few hurdles to the 47th President in enacting major policy reform.

Trump is expected to enact looser fiscal policy, while his protectionist stance on trade and immigration is expected to benefit the dollar. 

Source: Investing.com