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Micron plummets after downbeat quarterly forecast

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Lennar ( LEN ) down after Q4 results come in below estimates

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Futures up: Dow 0.82%, S&P 500 0.81%, Nasdaq 0.75%

(Updates before markets open)

By Medha Singh and Purvi Agarwal

Dec 19 (Reuters) -

Wall Street's main indexes were set for a higher open on

Thursday, a day after the Federal Reserve's projections of

fewer-than-expected interest rate cuts and higher inflation next

year wrong-footed some investors and pummeled U.S. stocks.

The Fed on Wednesday said it expects to make just two 25

basis point cuts in 2025, half a percentage point less than its

September forecast and raised inflation expectations for the

first year of the new Trump administration, sending the three

main U.S. stock indexes to their sharpest daily declines since

August.

Traders now see just one quarter-point rate reduction by

mid-2025, and see less than two cuts in total by the end of the

year, compared with last week's expectations of three rate cuts.

"The market tends to 'pop after a drop' but I wouldn't be

surprised if we end up giving back much of the gains toward the

end of the day because investors don't want to be over exposed

over the weekend," said Sam Stovall, chief investment strategist

of CFRA Research.

The benchmark S&P 500 hit a near one-month low on

Wednesday as investors adjusted their risk exposure to reflect

the impact of higher borrowing costs in 2025, while the Dow

dropped for the tenth straight session, its longest

streak of losses since 1974.

At 8:37 a.m. ET, Dow E-minis were up 347

points, or 0.82%, S&P 500 E-minis were up 48 points, or

0.81% and Nasdaq 100 E-minis were up 160 points, or

0.75%.

The hawkish shift from the Fed comes just three months after

the U.S. central bank began its monetary easing cycle with a

larger-than-usual 50 basis point interest rate cut that spurred

risk appetite and helped push Wall Street to record levels.

"Projecting only two rate cuts next year indicates that

the Fed acknowledges the ongoing 'remarkable' strength of U.S.

economic conditions and suggests that further reductions in

their policy rate may not be necessary," said JoAnne Bianco,

partner and investment strategist at Bondbloxx.

Meanwhile, data on the day showed gross domestic product for

the third quarter was revised up at 3.1%, from 2.8% earlier,

while the number of Americans filing new applications for

jobless benefits fell more than expected last week, consistent

with a gradual cooling in labor market conditions.

The CBOE volatility index, Wall Street's fear gauge,

eased to 21.27 points from a four-month high of 28.32 a day

earlier.

Stocks broadly recovered some ground in premarket trading

from sharp losses on Wednesday. Megacap Tesla and

Nvidia ( NVDA ) gained over 2% each.

Among corporate news, Micron slumped 11.7% after its

forecast of quarterly revenue and profit below estimates.

Accenture ( ACN ) gained nearly 5% as the IT services

provider

beat

Wall Street estimates for first-quarter revenue, while

homebuilder Lennar ( LEN ) shed 8% after

reporting

fourth-quarter results below estimates.

Vertex Pharmaceuticals ( VRTX ) tumbled 11% after the

company said its experimental non-opioid drug showed little

difference versus a placebo in reducing pain in a mid-stage

study.