U.S. stock index futures rose on Thursday following the release of a new economic report that bolstered the case for potential interest rate cuts by the Federal Reserve. Investors were eagerly awaiting more data and comments from policymakers to gain insights into the timing of these cuts.
The S&P 500 and Nasdaq closed higher on Wednesday as the U.S. services industry growth slowed in March. Federal Reserve Chair Jerome Powell’s statements, indicating a possibility of rate cuts later in the year, also influenced market sentiment.
Kathleen Brooks, research director at XTB, emphasized the significance of Powell’s remarks, noting that despite positive inflation and labor market data, the prospect of interest rate cuts remains on the table.
Investors have been cautious about the timing of rate cuts due to mixed reports on economic performance. Equities experienced a dip earlier in the week following strong economic reports, raising doubts about the three rate cuts anticipated for the year.
Currently, money markets are indicating a nearly 59% chance of at least a 25 basis point rate cut in June, according to the CME Group’s FedWatch tool.
Market focus will be on Fed policymakers, including voting members like Richmond Fed President Thomas Barkin and Cleveland counterpart Loretta Mester, for further insights on monetary policy. Additionally, upcoming data releases, such as initial jobless claims and nonfarm payrolls, will be closely monitored for market impact.
In premarket trading, megacap growth stocks like Meta Platforms, Amazon.com, and Nvidia showed slight gains. Individual stocks like Levi Strauss and Micron Technology also saw positive movements, with Levi Strauss raising its annual profit forecast and Micron Technology reaching a record high.
Overall, market participants are closely watching developments in the economy and Federal Reserve policies for potential impacts on stock index futures.