Stocks are predicted to rise significantly at the beginning of trading this Thursday based on market reactions to the recent Federal Reserve announcement. The S&P 500 futures have already seen an increase of 0.8 percent.
Traders' eased worries over the Federal Reserve's potential next move for monetary policy might be contributing to Wall Street's positive momentum. Concerns were over if the next policy might be to increase the interest rate instead of reducing it. However, these fears were put to rest when the Federal Reserve's Chair, Jerome Powell, stated that he views any rise in interest rates as improbable.
Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report, explained that the market was worried about the Federal Reserve adopting a more aggressive approach, which might have included interest rate hikes. Though, Powell seemed to dismiss this idea with his comments that the current rates are considered restrictive by the Federal Open Market Committee, and thus hampering demand.
The next Federal Reserve monetary policy meeting is on June 11-12 and the interest rates are expected to remain unchanged as before.
In employment news, a report from the U.S. Labor Department indicated that initial jobless claims remained steady during the week ending on April 27. The number of claims stayed at 208,000, contrary to expectations which predicted a rise to 212,000.
The Labor Department also released a report showing that labor productivity in the U.S. saw a modest increase in the first quarter of 2024. Productivity rose by 0.3 percent after its 3.5 percent growth in the previous quarter.
The Commerce Department reported a slight narrowing of the U.S. trade deficit in March from February. It is now at $69.4 billion.
Shortly after start of trading, Commerce Department is expected to release another report on new orders for manufactured goods in March. Predictions suggest a potential surge of 1.6 percent after a 1.4 percent increase in February.
The stock market performed variably after the Federal Reserve's monetary policy announcement. Initially, major averages surged but fell back by the close of the day.
The stock markets across Asia-Pacific had a mixed performance on Thursday, as did European markets.
In commodities trading, despite a massive fall of $2.93 to $79 a barrel on Wednesday, crude oil futures are back up, trading at $79.63 a barrel.
In terms of currency, the U.S. dollar is trading at 154.51 yen and is valued at $1.0710 against the euro.