February 6, 2023

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Stock futures rose after Powell pushed higher

Stock futures rose after Powell pushed higher

US stock futures rose slightly on Thursday as December trading began with a tailwind from Federal Reserve Chairman Jerome Powell. sign of slowing down In frequency and volume increase as early as this month.

Futures contracts linked to the S&P 500 Index (^ The Salafist Group for Preaching and Combat) and the Nasdaq Technology Heavy Composite (^ ix) rose about 0.2%, while those on the Dow Jones Industrial Average traded just above the break-even point. In other pockets of the market, the US dollar index fell to a three-month low, and US Treasury yields stabilized after sharp declines.

Filings for unemployment insurance fell last week, and settled near historic lows. Initial jobless claims, the latest snapshot of the labor market, appeared on 225,000 for the week ending November 26Labor Department figures showed Thursday, a decrease of 16,000 from the revised level of the previous week.

Thursday’s moves follow across major averages In the previous session on the heels of Powell’s speech in Washington, D.C., in which he indicated that US central bank officials may change their final interest rate hike later this month to 50 basis points. Wednesday saw the S&P 500 rebound 3.1%, the Dow up 2%, or more than 700 points – and out of a bear market – and the Nasdaq up 4.4%.

“It makes sense that we would moderate the pace of our rate increases as we approach a level of restraint that would be sufficient to bring down inflation,” Powell said, speaking at the Brookings Institution, acknowledging the “uncertain delays in tightening monetary policy.” “The time to adjust the pace of interest rate increases may come as soon as we meet in December.”

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Powell’s comments will likely be the last public statements he will make before Fed officials enter a blackout period – a time when policymakers limit public speaking before a policy-setting meeting – ahead of their next meeting on December 13-14.

“The focus now should not be on pace, but how far higher rates will need to go and how long they will need to stay there,” Jason England, global bond portfolio manager at Janus Henderson Investors, said in a note. Since the Fed will need to see “more substantial evidence” that inflation is easing before it stops, and Powell ended his speech by saying that “history warns hard against premature easing,” pricing in cuts is premature.

WASHINGTON, DC – NOVEMBER 30: US Federal Reserve Chairman Jerome Powell speaks at the Brookings Institution, November 30, 2022 in Washington, DC. Powell discussed the economic outlook, inflation and the labor market. (Photo by Drew Angerer/Getty Images)

Sentiment got a boost Thursday from easing concerns about COVID-free China unrest after Deputy Prime Minister and senior government official Sun Chunlan He urged an “improvement” of the country’s virus response It also weakens pathogenicity.

Meanwhile on the company side, all eyes have been on Salesforce (CRM) After the news will co-CEO Brett Taylor He steps down in January Co-founder Marc Benioff will become sole CEO. The shares fell more than 7% before entering the market.

snowflake (snowShares also fell in extended trading after the company’s fourth-quarter product revenue forecast missed estimates of an expected slowdown in technology spending. The stock fell about 4% before the open.

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Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @tweet

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