Stock futures exhibited a mixed performance on Thursday, accompanied by a slight decline in Treasury yields, after Federal Reserve Chair Jerome Powell tempered expectations of further interest-rate hikes. Meanwhile, the yen resumed its losses following a sudden surge that hinted at intervention. European equity contracts remained relatively stable, while US futures on the S&P 500 showed modest gains.
The Bloomberg index of the dollar experienced a second consecutive day of decline, mirroring the drop in US yields subsequent to the Fed’s decision. With the Fed’s stance on interest rates clarified, market participants turned their attention to other catalysts, including euro-area manufacturing data and the quarterly results of Apple Inc., scheduled for later in the day.
In a unanimous decision, the Federal Reserve opted to maintain the target range for the benchmark federal funds rate at 5.25% to 5.5%, citing persistent inflationary pressures indicated by recent data. Powell emphasized the improbability of imminent rate hikes, stating that compelling evidence would be required to justify any tightening of policy in order to steer inflation back toward the 2% target.
Kyle Rodda, a senior market analyst at Capital.com in Melbourne, noted that market expectations for a hawkish surprise from the Fed were high, but Powell’s remarks indicated otherwise. “The bar was set high for a hawkish surprise last night,” Rodda commented, “and the Fed ‘did not attempt to leap it.'” As investors digest the implications of the Fed’s decision and await further economic indicators, market sentiment remains cautiously optimistic, with attention focused on potential shifts in monetary policy and corporate earnings reports.
