US pre-open: Stocks to edge up after Fed-fuelled losses

US stocks looked set for small gains at the open on Thursday following heavy losses the day before on the back of a less dovish than expected rate announcement by the Federal Reserve.

At 1300 GMT, Dow Jones Industrial Average and S&P 500 futures were up 0.3% and 0.5%, respectively, while Nasdaq futures were 0.5% firmer.

On Wednesday, US equity markets slumped to a 15-month low after the Fed hiked interest rates by 25 basis points for the fourth time this year, but lowered projections for future rate hikes and economic growth and downplayed the recent turmoil in financial markets.

The US central bank said it now expects two more rate hikes next year, down from a previous projection of three, but disappointing market participants who were pricing in just one. The Fed also cut its GDP growth estimate for this year by 0.1 percentage points to 3%, while 2019 growth outlook was reduced by 0.2 percentage points to 2.3%.

Deutsche Bank said: "The post-meeting statement, the dots and the press conference, combined, came across as a relatively balanced step in a more dovish direction for the Fed, but less so than the market was expecting.

"Although more rate hikes are likely coming, the timing is now less certain, as the Fed has clearly moved closer to slowing the current pace of tightening. Further rate hikes will increasingly be driven by both the incoming data and the performance of financial markets as they influence the economic outlook. We continue to expect these developments to support another rate hike in March and possibly in June. However, beyond that horizon downside risks have mounted to our terminal rate expectations."

In corporate news, Accenture rose in pre-market trade after its first-quarter results, while Conagra Brands slumped 5% after its second-quarter numbers.

Walgreens Boots Alliance was likely to be in focus as its quarterly earnings and revenue beat analysts’ expectations, while BlackBerry rallied in pre-market trade after posting a better-than-expected quarterly profit.

On the data front, initial jobless claims and the Philadelphia Fed manufacturing survey are at 1330 GMT.