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Futures steady after Trump-fueled rally, Fed's rate decision awaited
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Futures steady after Trump-fueled rally, Fed's rate decision awaited
Nov 9, 2024 11:56 AM

(Reuters) - U.S. stock futures edged higher ahead of an interest-rate decision by the Federal Reserve on Thursday, building on a sharp rally set off by Donald Trump's stunning comeback as U.S. president for a second time.

Traders have about fully priced in a 25-basis point rate cut, but will keep a close watch on the central bank's policy statement for any clues on the future path of monetary easing.

"Futures prices suggest it will be a much quieter day today on the US markets, albeit still with some gains," said Russ Mould, investment director at AJ Bell.

"Investors might simply be taking stock of events and waiting to see the scale of a rate cut from the Fed."

Investor expectations that Trump would lower corporate taxes and loosen regulations had in the previous session lifted all three major indexes to a record high.

The Dow, S&P 500 and small-cap Russell 2000 notched their biggest one-day rise since November 2022, while the Nasdaq hit its best day since February.

At 5:08 a.m. ET, Dow E-minis were up 82 points, or 0.18%. U.S. S&P 500 E-minis were up 11.5 points, or 0.19% and Nasdaq 100 E-minis were up 49 points, or 0.23%.

Futures tracking the small cap index were up 0.3%, trading at a near three-year high.

Traders are betting the Fed will cut its policy rate only twice in 2025 against the backdrop of consistently robust economic data and chances of higher inflation due to Trump's proposed tariffs and government spending.

Focus is also on whether Republicans could retain control in the U.S. House of Representatives after winning a majority in the Senate, which would make it easier for Trump's policies to be enacted.

Meanwhile, rate-sensitive equities could come under some pressure as Treasury yields soared after Trump's election. [MKTS/GLOB]

Some stocks that soared after his sweeping win gave back gains, with Trump Media & Technology losing 9.5%, and Tesla edging 0.7% lower after a nearly 15% gain on Wednesday.

Qualcomm shares jumped 7.9% after the chipmaker forecast current-quarter sales and profit to exceed Wall Street estimates.

The VIX, Wall Street's "fear gauge," was trading at a six-week low.

Weekly initial jobless claims data is due at 8:30 a.m. ET.

(Reporting by Lisa Mattackal in Bengaluru; Editing by Arun Koyyur)

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