The major U.S. index futures are indicating a higher open on Thursday, suggesting that stocks are poised for an upward movement following yesterday’s mixed and volatile session. Technology stocks could potentially drive an early rally, the 1.1 percent increase in the tech-heavy Nasdaq 100 futures. The upward momentum for tech stocks is evident as shares of Intel surge by 30.2 percent in pre-market trading following the chipmaker’s announcement of a collaboration with Nvidia to jointly develop multiple generations of custom data center and PC products.
Nvidia is experiencing a 2.7 percent increase in pre-market trading after a series of declines in recent sessions. The company plans to invest $5 billion in Intel’s common stock, acquiring shares at a price of $23.28 each. The futures maintained a strong positive trajectory, report indicated that initial jobless claims decreased more than anticipated for the week ending September 13th. Reports indicated that initial jobless claims decreased to 231,000, reflecting a reduction of 33,000 from the previously revised figure of 264,000 for the prior week. Analysts had anticipated that jobless claims would decrease to 240,000, down from the initially reported 263,000 for the prior week.
Stocks exhibited a subdued performance for the majority of the session on Wednesday, but experienced significant volatility in the afternoon following the Federal Reserve’s much-anticipated monetary policy announcement. The major averages exhibited significant volatility, oscillating around the unchanged line before ultimately finishing with mixed results. The Dow increased by 260.42 points, representing a 0.6 percent rise, reaching 46,018.32. Conversely, the S&P 500 decreased by 6.41 points, or 0.1 percent, settling at 6,600.35, while the Nasdaq declined by 72.63 points, equivalent to a 0.3 percent drop, closing at 22,261.33. The late-day fluctuations occurred after the Federal Reserve’s anticipated announcement regarding its decision to reduce interest rates by a quarter point. The Federal Reserve announced a decision to reduce the target range for the federal funds rate by 25 basis points, bringing it to a range of 4.0 percent to 4.25 percent, attributing this move to a change in the balance of risks. The most recent forecasts from Federal Reserve officials indicate an expectation for the central bank to reduce rates two additional times this year, with projections placing rates between 3.50 percent and 3.75 percent by the conclusion of 2025.
Market participants might have felt let down by the apparent reluctance of Federal Reserve officials to implement aggressive interest rate cuts, as only the recently appointed Fed Governor Stephen Miran expressed a preference for a half-point reduction during the latest meeting. “The robust support for the 25-basis-point cut indicates that members, while recognizing the heightened downside risks to the job market, are not exhibiting panic regarding the economic situation,” stated Mike Fratantoni. The most recent projections indicate that Federal Reserve officials anticipate only a single rate cut in the upcoming year, despite notable divergences in perspectives regarding the economic outlook. The upcoming monetary policy meeting of the central bank is set for October 28-29. There is currently an 87.7 percent probability that the Fed will implement a further quarter-point rate reduction.
In line with the tepid performance of the broader markets, the majority of the key sectors concluded the day with only slight fluctuations. Banking stocks experienced a notable upward movement, as evidenced by the KBW Bank Index rising by 1.3 percent to achieve a record closing high. Conversely, oil service stocks declined in tandem with the price of crude oil, resulting in a 1.1 percent decrease in the Philadelphia Oil Service Index.