Stock market today: Live updates
A trader works on the trading floor at the New York Stock Exchange following the Federal Reserve rate announcement on Sept. 18, 2024.
Andrew Kelly | Reuters
U.S. stock futures rose early Thursday as traders digested the Federal Reserve’s earlier decision to lower interest rates by a half percentage point.
Dow Jones Industrial Average futures rose 259 points, or 0.6%. Futures tied to the S&P 500 climbed about 1%, while Nasdaq 100 futures added 1.4%.
The U.S. central bank slashed its overnight lending rate to a range of 4.75% to 5.00% from 5.25% to 5.5% on Wednesday, which came as a surprise to some investors who criticized the size of this initial cut. This is the first rate reduction delivered by the Fed in four years.
After seesawing for most of the afternoon, stocks ultimately closed Wednesday’s session lower. Both the S&P 500 and 30-stock Dow initially rallied to new record highs right after the Fed announced its interest rate cut decision.
Tom Porcelli, chief U.S. economist at PGIM Fixed Income, attributed the market’s Wednesday move lower to Powell’s emphasis that an initial 50 basis point rate cut does not set the precedence for further drastic rate reductions to follow.
“The market was thinking to itself, ‘If you go 50, another 50 has a high likelihood.’ But I think he really dashed that idea to some extent. It’s not that he thinks that’s not going to happen, it’s that he’s not pre-committing to that to happen. That is the right call,” Porcelli said.
Darden Restaurants, shipping giant FedEx and homebuilder Lennar will report their earnings Thursday. Traders will also watch out for August’s existing home sales and the latest weekly jobless claims.
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