US stock futures rose on Wednesday night after the Federal Reserve hinted at multiple interest rate cuts through 2024, and the Dow Jones Industrial Average closed at an all-time high.
Futures on the 30-stock Dow rose 90 points, or 0.2%. S&P 500 and Nasdaq 100 futures gained 0.3% and 0.4% respectively.
The Federal Open Market Committee left interest rates unchanged at a range of 5.25% to 5.5%, in line with Wall Street expectations. Market sentiment was buoyed after policymakers penciled in three rate cuts next year.
In regular trading, the Dow rose 1.4% in the main session to close at 37,090.24. This was the first time the 30-share index has closed above 37,000 and broke its previous closing high from January 2022. The S&P 500 gained 1.37% to close above 4,700 for the first time since January 2022. The Nasdaq Composite gained 1.38%. The three major averages all rose to new 52-week highs.
The central bank’s comment was a “hint that we’re on a path to a soft landing – and maybe they’ll be able to ease policy more than the market expects in 2024,” said Ross Mayfield, investment strategy analyst at Baird.
Mayfield believes the market rally of the past six weeks and following Powell’s comments is now “justified”.
“We’re basically priced for perfection,” Mayfield said. “We’re probably at a point where the risks in 2024 are a little bit skewed to the downside, but a soft landing is certainly in the cards and the Fed’s acknowledgement today helps justify the move in equities.”
In extended trading on Wednesday, Adobe shares were down more than 4% after the company issued muted earnings and revenue guidance for 2024.
Investors will keep an eye on economic data on Thursday. Weekly jobless claims will be released at 8:30 ET. November retail sales and imports data are also due in the morning, as well as October business inventories.
