Wall Street was set for a higher open on Thursday as expectations that the Federal Reserve was at the end of its monetary tightening lifted sentiment ahead of further policy cues from central bank officials.
Softer-than-expected monthly jobs data and a tempering of the Fed’s hawkish stance at its last meeting pulled U.S. Treasury yields down from multi-year highs, helping equities stage a stellar comeback from their October lows.
However, the rally lost steam as several Fed policymakers this week pushed back against market expectations that the central bank will begin cutting interest rates soon.
The benchmark S&P 500 and the Nasdaq eked out marginal gains on Wednesday, but managed to extend their recent winning streak.
“The market is coming back more towards the Nasdaq over the last several days, versus the Dow and the more cyclical and value oriented components,” said Thomas Martin, senior portfolio manager at GLOBALT Investments.
Wall St slips as investors assess central bank comments
“There’s a back and forth with these things and particularly with regard to the economy and whether you’re hard or soft in terms of the landing.”
A majority of traders are betting that the Fed will keep interest rates unchanged this year, with odds of a cut of at least 25 basis points in May standing at nearly 45%, according to the CME Group’s FedWatch tool.
Chicago Fed President Austan Goolsbee said the U.S. central bank will need to pay close attention to the effects of higher longer-term bond yields to make sure they don’t slow the economy more than expected over the coming year, according to a Wall Street Journal report.
Among the Fed speakers on tap, Chair Jerome Powell is scheduled to speak at an International Monetary Fund (IMF) conference at 2 p.m. ET (1900 GMT). He had refused to comment on monetary policy at another conference on Wednesday.
Richmond Fed President Thomas Barkin is expected to discuss the outlook for the U.S. economy later in the day.
Meanwhile, a Labor Department report showed weekly jobless claims stood at 217,000 in the week ended Nov. 4, lesser than the 218,000 claims forecast by economists.
The yield on the benchmark ten-year Treasury note edged up to 4.5530%.
Among major movers, Nvidia shares rose 1.9% in premarket trading as local media reported the chip designer is planning to release three new chips for China. Other megacap growth stocks were mixed.
At 8:51 a.m. ET, Dow e-minis were up 91 points, or 0.27%, S&P 500 e-minis were up 10.75 points, or 0.24%, and Nasdaq 100 e-minis were up 9.5 points, or 0.06%.
On the earnings front, shares of Walt Disney rose 4.0% after the entertainment company’s quarterly profit exceeded Wall Street estimates.
Arm Holdings dropped 6.1% as the semiconductor firm’s third-quarter sales forecast fell short of estimates.
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