Investing.com–U.S. stock index futures edged higher Thursday, continuing the positive tone generated by Donald Trump winning the 2024 presidential election, with the focus now shifting to the Federal Reserve.
At 06:20 ET (11:20 GMT), rose 75 points, or 0.2%, gained 9 points, or 0.2%, and rose 40 points, or 0.2%.
The main indices posted strong gains Wednesday, all closing at record highs, with the blue chip gaining over 1,500 points, logging its best day since 2022.
Investors cheered the prospect of lower corporate taxes under Trump, while the possibility of a Republican sweep in Congress presented a clear path for major policy changes.
So-called “Trump trades” — or assets that have roughly tracked the former president’s chances of winning the race throughout the campaign — rallied on Wednesday. The US dollar spiked by the most in two years and US Treasury yields increased.
Federal Reserve in focus
Attention now turns to the conclusion of the latest later in the session.
Markets are broadly pricing in a quarter-point borrowing cost reduction in the benchmark fed funds rate, which currently stands at a range of 4.75% to 5%. In September, the Fed slashed rates by an outsized 50 basis points in a bid to provide support to labor demand during a time of waning inflationary pressures.
Investors will be keen to hear if Fed Chair Jerome Powell will comment on the path ahead for rates this year. Futures contracts tied to the Fed’s policy rate are also factoring in an additional drawdown in December, although these wagers were somewhat dented following Trump’s victory.
The bank’s outlook on interest rates remained a point of uncertainty, especially as recent data showed stickiness in inflation.
More quarterly earnings due
There are more quarterly earnings to digest Thursday, with Moderna (NASDAQ:) and Warner Bros Discovery (NASDAQ:) due before the opening bell, and numbers from Block (NYSE:), Pinterest (NYSE:) and Rivian Automotive (NASDAQ:) due after the close.
Some positive chipmaker earnings also buoyed sentiment, with Qualcomm (NASDAQ:) stock rising over 8% premarket beating quarterly expectations.
Crude continues to weaken
Oil prices slipped lower Thursday, adding to the previous season’s lows as traders digested the ramifications of a Donald Trump presidency amid hopes for more stimulus from top importer China.
By 06:20 ET, the Brent contract slipped 0.9% to $74.27 per barrel, while U.S. crude futures (WTI) traded 1.1% lower at $70.88 per barrel.
The crude benchmarks had weakened during the previous session, weighed by a surge in the dollar as well as a bigger-than-expected build in U.S. .
However, traders are now beginning to consider the potential for a Trump presidency squeezing oil supply from Iran and Venezuela, while his policies have tended to be pro-business, which likely supports overall economic growth and increases demand for fuel.
Additionally, China’s National People’s Congress is widely expected to outline plans for more fiscal spending in the coming months to boost economic growth.
Hurricane Rafael is building in intensity as it moves through the Gulf of Mexico, shutting in a significant portion of the region’s production.
(Ambar Warrick contributed to this article.)
