US pre-open: Futures trade higher following yesterday’s FOMC-fuelled rally

Wall Street futures were in the green ahead of the bell on Thursday following yesterday's record-setting rally.

As of 1200 GMT, Dow Jones futures were up 0.26%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.32% and 0.42% firmer, respectively.

The Dow closed 512.30 points higher on Wednesday as the Federal Reserve pointed to multiple rate cuts in 2024.

The blue-chip index jumped more than 1% on Wednesday to hit a fresh record high of more than 37,000 after the Federal Open Market Committee hinted that rates will be cut up to three times in 2024, indicating that the Central Bank was on a path to successfully implementing a soft landing for the US economy.

Scope Markets' Joshua Mahony said: "Traders continue to react off the back of yesterday's surprisingly dovish take from the FOMC. Coming into the meeting with a substantial gap between the September dot plot and market expectations, there was always a question of whether the Fed planned to adjust towards the market view or seek to reign in expectations over monetary policy next year.

"Powell's decision to cut inflation expectations and the outlook for interest rates across 2023, 2024, and 2025 highlighted a bank that is gearing up for a sharp pivot next year. The dramatic nature of this shift can be seen through the adjustment in rate cut expectations for March, which has gone from pricing a 40% chance of a rate cut, to 95%. With the Fed now predicted to cut rates by 150-basis point next year, we have seen a sharp uptick in risk assets and precious metals."

Treasury yields, which move inversely to stocks, headed south following Powell's comments, with the benchmark 10-year note down roughly eight basis points at 3.947% and its two-year counterpart more than ten basis points lower at 4.328%.

On the macro front for Thursday, weekly jobless claims numbers from the Labor Department will be out at 1330 GMT, as will November's import/export price data, retail sales figures, and October's business inventories report.

In the corporate space, shares of Adobe were more than 4% lower in pre-market trade following somewhat muted guidance for both earnings and revenue in 2024.

Reporting by Iain Gilbert at Sharecast.com