Stock futures surged across the board on Thursday, with Nasdaq futures leading the way, as investors turned back to technology stocks in the wake of the Federal Reserve's rate cut decision and signals of more cuts on the horizon. Futures linked to the Dow Jones Industrial Average climbed 333 points, or 0.7%, while S&P 500 futures and Nasdaq-100 futures both saw gains of 0.9%.
The market's reaction came after a turbulent trading session on Wednesday following the Fed's anticipated rate cut of a quarter percentage point. The Dow Jones Industrial Average was the only index to edge higher, up 0.57%, while the S&P 500 and Nasdaq Composite slipped 0.1% and 0.33%, respectively.
Federal Reserve Chair Jerome Powell, in a news conference post the rate decision, tempered expectations of aggressive rate cuts by labeling the move as "risk management." The central bank foresees two more reductions this year and one in 2026, contrasting with market expectations of two to three cuts next year.
Gina Bolvin, President at Bolvin Wealth Management Group, commented that the Fed's cut indicates a measured approach rather than a drastic pivot, offering investors modest rate relief without fireworks. The path forward will depend on forthcoming inflation and labor market data.
Despite Wednesday's setbacks, both the S&P 500 and the Nasdaq were on track for weekly gains of 0.2% and 0.5% respectively, with the S&P 500 heading for its sixth positive week in seven and the Nasdaq eyeing its third consecutive week of gains. The Dow Jones was also showing signs of a second consecutive week of gains at 0.4%.
Market analyst Adam Crisafulli observed that market bulls regained control post-Fed announcement-induced volatility. He noted that despite mixed reactions among investors immediately after the Fed's move, the dust has settled with bulls steering both stock and bond prices higher.
On the corporate side, Cracker Barrel Old Country Store experienced a sharp decline of over 9% in extended trading on Wednesday following a fourth-quarter earnings miss. The company reported adjusted earnings per share below analysts' expectations but exceeded revenue estimates. Disappointing full-year guidance contributed to the stock's decline.
Additionally, U.S. stock futures opened positively on Wednesday evening, with futures tied to the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 all showing gains.
Looking ahead, U.S. stock markets were positioned for potential record highs on Thursday after the Fed's rate cut and hints of further reductions. Despite initial hesitation, markets appeared to shrug off uncertainties and focus on economic indicators and corporate earnings releases, such as FedEx's quarterly results expected after market close.
Moreover, global business and financial news outlets reported on various developments, including a state visit by President Trump to the UK and Moody's Ratings highlighting potential risks in Oracle's recent artificial intelligence contracts.
In conclusion, the Fed's actions and market responses signal ongoing volatility and the importance of future economic data releases and corporate performance in driving market sentiment. Investors will closely monitor upcoming developments as they navigate the ever-changing financial landscape.