US pre-open: Stocks set for another day of gains

US stocks looked set for another day of gains on Thursday a day after the Federal Reserve decided to stand pat on rates but suggested a hike would come later this year.

At 1120 BST, Dow Jones Industrial Average and S&P 500 futures were up 0.3%, while Nasdaq futures were 0.4% higher.

Meanwhile, oil prices advanced as the dollar lost ground, with West Texas Intermediate up 0.9% to $45.76 a barrel and Brent crude 0.8% firmer at $47.18.

On Wednesday the Fed kept interest rates unchanged at between 0.25% and 0.50%, with three members dissenting in favour of an immediate 25 basis points hike. This was the first time in five years that three voters have dissented in the same direction.

Meanwhile, the Summary of Economic Projections was a bit more dovish, showing one hike this year and two next year, down from two and three, previously.

The central bank said the case for a rate increase has strengthened, leaving the door open to a move by the end of the year.

The Federal Open Market Committee said: “The Committee judges that the case for an increase in the federal funds rate has strengthened, but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

Goldman Sachs said its US economics team assigns a cumulative 65% probability to a rate hike by the 14 December FOMC meeting, which is roughly the same as implied by fed fund futures.

Meanwhile, Societe Generale said: “The outcome of the September FOMC meeting was in line with our expectations, as the Committee reintroduced the balance of risks statement, removed a rate hike this year and in 2017, and cut the longer-run nominal neutral funds rate.

“In our view, the reintroduction of the balance of the risks statement was a way to bridge the divide between the hawks and doves on the Committee, and it took the Fed a step further towards raising the funds rate in December.”

Corporate news was scarce, but Bed Bath & Beyond was a touch higher in pre-market trade despite reporting weaker-than-expected quarterly earnings late on Wednesday.

On the data front, initial jobless claims are at 1330 BST along with the Chicago Fed’s national activity index, with leading indicators, existing home sales and consumer confidence at 1500 BST.