U.S. stock index futures were sharply higher on Thursday morning, after the Federal Reserve on Wednesday signaled possible interest rate cuts later this year [around 6:47 a.m.]. ET, futures indicated positive open or more than 226 points. Futures on the S&P and Nasdaq were both seen higher, as well.
The Fed's message sent the 10-year Treasury yield below 2% for the first time since November 2016. Investors bid stock futures higher overnight on the decline in the benchmark for mortgage rates and corporate bonds. The yield stood at 2.8% in January
The Fed signaled on Wednesday interest rate cuts could be coming, beginning as early as July. Policy makers said they would be ready to battle growing global and domestic economic risks as they took stock of intensifying trade tensions and growing concerns about inflation. Most Fed policy makers slashed their rate outlook for the rest of the calendar year by approximately half a percentage point in the previous session, while Chairman Jerome Powell said others agree the case for lower rates is building.
Shares of Netflix and Amazon, which have led the bull market of the last 1
Many market participants viewed the overall tone from the U.S. central bank as more dovish than expected. Traders are now pricing in a 100% chance of a rate cut next month, according to the CME FedWatch tool.
On the data front, investors are likely to monitor the latest weekly jobless claims figures, first-quarter current account data, and the Philadelphia Fed manufacturing survey for June due out at 8:30 am ONE. Leading index figures for May will follow slightly later in the session.