U.S. stock market futures rose early Thursday morning after the Federal Reserve reiterated its commitment to keep raising interest rates to reduce inflation.
Futures contracts on the Dow Jones Industrial Average (DJIA) gained 0.15%, while those of the S&P 500 (SPX) edged up 0.19%, as of 6:13 a.m. EST Thursday. Meanwhile, the Nasdaq 100 (NDX) futures climbed 0.18%.
What happened on the stock market on Wednesday?
The Dow Jones slid 0.5% in Wednesday’s regular trading session, snapping its five-day gains. The S&P 500 and Nasdaq also posted losses of 0.72% and 1.21%, respectively at the closing bell.
The market was in turmoil on Wednesday after the Fed said it intended to keep raising interest rates until inflation fell back to around 2%. Note that the inflation rate, according to the July consumer price index, was 8.5%, far from the Fed’s target rate. This means that there is still a long way to go before the Fed ends its monetary tightening campaign.
However, the Fed also said the pace of policy tightening, in each cycle, will depend on competing market conditions. However, investors who had expected a slight easing of the Fed’s stance given the slowdown in inflation in July were not convinced. The market is still widely expecting a 75 basis point rise in the September round.
Additionally, Target (TGT) missed gains and Lowe’s (DOWN) mixed quarterly results added to worries among investors, who now look forward to more retail earnings this week.
More economic data awaits you
Later Thursday, July existing home sales data will be released by the National Association of Realtors, amid a cooling housing market.
High mortgage rates have made buying a home impossible. In addition, high construction prices and costs had led to a drop in new home construction in July. Sellers have cut prices in many areas, but prices are still significantly above last year’s price levels.
Additionally, last week’s unemployment claims will also be released on Thursday. Recall that for the week ending August 5, weekly jobless claims of 262,000 had continued to climb to reach the highest point this year so far.