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Dow, S&P 500 futures at record highs

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Small caps set to continue rally

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Futures up: Dow 0.24%, S&P 500 0.25%, Nasdaq 0.31%

(Updated at 7:08 a.m. ET/1208 GMT)

By Lisa Pauline Mattackal

Nov 7 (Reuters) - U.S. stock futures rose 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 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.

Dow E-minis were up 104 points, or 0.24%, S&P 500

E-minis were up 14.75 points, or 0.25% and Nasdaq 100

E-minis were up 65.25 points, or 0.31%.

Futures tracking the small cap index jumped 0.7%,

trading at a near three-year high.

Traders have trimmed their bets to just two rate cuts in

2025 on consistently robust economic data, while also taking

into account the chances of higher inflation stemming from

Trump's proposed tariffs and government spending.

"After December we now see the Fed easing at a quarterly

pace, with the next ease in March and continuing until the funds

rate reaches 3.5%," J.P. Morgan analysts said in a note.

Focus is also on whether Republicans could win control of

both houses of Congress, making it easier for Trump's policies

to be enacted.

Meanwhile, rate-sensitive equities are facing some pressure

as Treasury yields soared after Trump's win.

Stocks that surged after his sweeping victory gave back

gains in premarket trade, with Trump Media & Technology ( DJT )

losing 13%.

Qualcomm ( QCOM ) shares jumped 7.1% after the chipmaker

forecast current-quarter sales and profit above estimates, while

U.S.-listed shares of chip designer Arm Holdings fell

6.2% as its quarterly forecasts disappointed investors.

Shares of vaccine maker Moderna ( MRNA ) gained 6.7% after

reporting a surprise third-quarter profit on higher COVID-19

vaccine sales.

Halliburton ( HAL ) dipped 1.5% after missing quarterly

profit estimates, as a slowdown in drilling activity in North

America weighed on demand for oilfield services and equipment.

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,

while earnings reports from companies, including Ralph Lauren ( RL )

and WW Kellogg are, are expected before the bell.