U.S. stock futures climbed on Thursday in premarket hours after the indices declined in the previous session following a hawkish cut from the Federal Reserve. The futures of all four major indices were trading higher.
The 10-year and two-year Treasury notes yielded 4.54% and 4.32%, respectively.
On Wednesday, the Federal Reserve did reduce interest rates by 0.25% to a range of 4.25%-4.5%, as expected. However, the revised economic projections indicate only two possible rate cuts in 2025—down from the four predicted in September and fewer than the three that markets had anticipated before the meeting.
The probability of having no change in the interest rates for the upcoming Jan. 31, 2025 decision was at 91.4%, according to CME Group’s FedWatch tool.
GDP revisions slated to be released later today will reveal whether the economy maintained the previously estimated 2.8% growth rate for the third quarter.
Investors will receive another critical economic data point on Friday with the release of the November personal consumption expenditures (PCE) inflation index. This release follows other inflation indicators that suggest price increases accelerated in November.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.28% |
| S&P 500 | 0.40% |
| Dow Jones | 0.37% |
| Russell 2000 | 0.39% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY was up 0.52% to $589.35 and the Invesco QQQ Trust ETF QQQ rose 0.48% to $518.94, according to Benzinga Pro data.
Cues From The Last Session
U.S. stocks closed lower on Wednesday, with the Dow Jones dropping for the tenth consecutive session, falling by more than 1,100 points.
On the economic front, the U.S. posted a current account deficit of $310.9 billion in the third quarter, up from a revised deficit of $275.0 billion in the previous quarter and exceeding market expectations of a $284 billion gap. Meanwhile, U.S. housing starts declined by 1.8%, reaching an annualized rate of 1.289 million units in November, down from 1.312 million in October.
All sectors of the S&P 500 ended the day in the red, with consumer discretionary, real estate, and communication services stocks seeing the largest losses.
“It’s been a very mild year with just 17 declines of 1% or more,” said Charlie Bilello, chief market strategist at Creative Planning Investor.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -3.56% | 19,392.69 |
| S&P 500 | -2.95% | 5,872.16 |
| Dow Jones | -2.58% | 42,326.87 |
| Russell 2000 | -4.39% | 2,231.51 |
Insights From Analysts
Talking about her 2025 projections after the Fed’s rate cut, Julia Khandoshko, the CEO of Mind Money in a conversation with Benzinga said, “In 2025, investors should focus on three key strategies: monitoring the impact of political and economic changes on markets, investing in promising sectors such as AI and biotechnology without excessive dependence on technology, and actively diversifying the portfolio with traditional industries and new opportunities in emerging markets.”
Chris Zaccarelli, chief investment officer for Northlight Asset Management, said that markets are forward-looking and reacted to the Fed’s 2025 projection and not the quarter-point cut that it delivered.
“Santa came early and dropped a 25-bps rate cut in the market’s stocking but accompanied it with a note saying that there would be coal next year,” Zaccarelli said.
Jeremy Siegel, professor emeritus at the University of Pennsylvania's Wharton School, described the stock market's recent downturn as a "healthy" reaction to the Federal Reserve's cautious approach to future interest rate cuts.
“The market was overly optimistic…so I am not surprised at the sell-off,” he said.
He suggested that the Fed might reduce rates only once or twice next year, with the possibility of no cuts at all due to inflation concerns. Siegel also mentioned potential tariffs from President-elect Donald Trump could impact inflation, though he believes the actual tariffs may not be as significant as feared.
Bill Adams, chief economist for Comerica Bank, said the Fed is reacting to the incoming Trump administration’s policies, which it sees as most likely to boost growth and inflation, as well as tighten the job market.
Trump does not have much control over the pace of rate cuts in the near term, Adams said, but “that could change in 2026 if President-elect Trump gets the Senate to confirm a new Fed chair who is more sympathetic to his policy goals.”
See Also: How To Trade Futures
Upcoming Economic Data
Important data is slated to be released in the rest of the week that will help investors determine the future course of action.
- On Thursday, the data for initial jobless claims till Dec. 14, GDP’s second revision for the third quarter, and Philadelphia Fed manufacturing survey data for December will be released at 8:30 a.m., ET.
- Existing home sales data and U.S. leading economic indicators for November will be announced at 10:00 a.m., ET.
- On Friday, personal income and spending data along with core and headline PCE index data for November will be released at 8:30 a.m., ET.
- Consumer sentiment data for December will be released at 10:00 a.m., ET.
- Carnival Corporation and Winnebago Industries will report earnings.
Stocks In Focus:
- Accenture Plc. ACN was up 3.56% ahead of its Q1 earnings call scheduled before the opening bell. Wall Street expects quarterly earnings at $3.40 per share on revenue of $17.12 billion.
- Micron Technology Inc. MU was down 15.52% after it posted better-than-expected earnings but sales missed expectations in the first quarter.
- Nike Inc. NKE was just up 0.4% in premarket a analysts expect it to post quarterly earnings at 64 cents per share on revenue of $12.13 billion after the closing bell.
- Lennar Corp. LEN was 8.85% lower in premarket trading after it reported worse-than-expected financial results for the fourth quarter.
- Sangamo Therapeutics Inc. SGMO was up 22.55% after it inked an agreement with Astellas Pharma allowing the latter to leverage Sangamo’s novel proprietary neurotropic adeno-associated virus capsid. Sangamo will receive a $20 million upfront license fee and is eligible to earn up to $1.3 billion in additional licensed target fees.
- KULR Technology Group Inc. KULR was up 27.88% after it announced plans to launch the KULR ONE Space battery via launch integrator Exolaunch on a SpaceX rideshare mission scheduled for 2026.
- Mesoblast Ltd. MESO rose 42.61% in pre-market trading after Mesoblast's RYONCIL became the first FDA-approved mesenchymal stromal cell therapy in the U.S.
Commodities, Bonds And Global Equity Markets:
Crude oil futures were lower in the early New York session by 0.94% to hover around $69.92 per barrel.
The gold spot index fell by 0.82% to $2,631.59 per ounce. The Dollar Index was down 0.12% to 107.893 level.
Asian markets declined on Thursday, as Hong Kong’s Hang Seng, South Korea’s Kospi, Japan’s Nikkei 225, India’s S&P BSE Sensex, and Australia’s ASX 200 index fell, while China’s CSI 300 index ended marginally higher.
Most European markets were also trading lower.
Read Next:
Photo courtesy: Wikimedia
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
