Futures Rise as Fed Eases Concerns Over Rate Hikes

U.S. stock index futures advanced on Thursday following the Federal Reserve’s decision to keep interest rates unchanged, easing concerns about potential rate hikes and shifting attention to a wave of earnings updates scheduled throughout the day.

Federal Reserve Chair Jerome Powell indicated that despite persistently high inflation, the anticipated U.S. rate cut would be delayed, dismissing discussions about the necessity of rate hikes.

According to the CME FedWatch tool, money markets assign a 58% probability of the first rate cut of at least 25 basis points (bps) occurring in September, while a higher 69% chance is priced in for a cut in November.

U.S. stocks initially saw gains but closed mixed on Wednesday following the Fed’s announcement.

Investor focus now turns to Friday’s crucial nonfarm payrolls data for clearer insights into the labor market and the trajectory of interest rates. On Thursday, investors will also monitor weekly jobless claims at 8:30 a.m. ET and March factory orders data at 10 a.m. ET.

Ahead of the opening bell, earnings reports from Moderna, Peloton, and Cardinal Health, among others, are scheduled.

According to LSEG data, of the 310 companies in the S&P 500 that have reported earnings as of Wednesday, 77.4% have exceeded earnings estimates, surpassing the historical average of 67%.

At 05:43 a.m. ET, Dow E-minis were up 131 points, or 0.34%, S&P 500 E-minis were up 29.25 points, or 0.58%, and Nasdaq 100 E-minis were up 141.75 points, or 0.81%.

Among early movers, Qualcomm surged 4.7% in premarket trading after the smartphone chips supplier forecast quarterly sales and adjusted profit above Wall Street expectations.

However, e-commerce firm eBay slipped 3.6% as it projected second-quarter revenue below estimates due to cooling demand.