Futures climb on bets of end to Fed's rate hikes
(Reuters) — Wall Street futures on Thursday got a boost from hopes that the Federal Reserve had reached the end of its tightening campaign, while a number of upbeat corporate forecasts also lifted sentiment.
The Fed held interest rates steady on Wednesday, as expected, and while Chair Jerome Powell left the door open to further tightening, he also acknowledged the impact of a recent surge in bond yields on the economy.
The comments, which were perceived to be dovish, sent U.S. Treasury yields tumbling, with the benchmark 10-year yield hitting a fresh two-week low.
That, in turn, fuelled gains in mega-cap growth stocks. Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA) rose between 0.8% and 2.2% in premarket trading on Thursday.
«Overall, markets interpreted the meeting to have been dovish,» said Charu Chanana, market strategist at Saxo Markets in a note.
«Given the weakening consumer and business confidence trends and rising risks of delinquencies, the odds remain tilted to suggest that we have reached an end of the Fed's tightening cycle.»
Traders pared back the risk of a December hike to about 20% and a January move to 25%, according to the CME Group's (NASDAQ:CME) FedWatch tool. They have also priced in a 70% chance that the tightening is over.
U.S. equities have kicked off November on a brighter note — after a gruelling October marred by fears of higher-for-longer interest rates and geopolitical tensions — though a mixed bag of earnings reports have kept a lid on sentiment.
However, with the third-quarter earnings season now well beyond the halfway point, the more recent quarterly reports from major Wall Street companies were upbeat.
Shares of Qualcomm (NASDAQ:QCOM) climbed 4.7% after the chip
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