Futures mixed as year end approaches; rate cuts in focus
2023.12.28 06:52
© Reuters. FILE PHOTO: A screen displays the Dow Jones Industrial Average after the closing bell on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 13, 2023. REUTERS/Brendan McDermid/File Photo
(Reuters) – U.S. stock index futures were mixed on Thursday, in light trading on the penultimate trading day of 2023, even as benchmark hovers around its all-time high on hopes of early interest rate cuts next year.
Gains in megacap stocks in premarket trading kept the Nasdaq futures higher, while those tied to the S&P 500 remained subdued.
Wall Street managed to eke out some gains on Wednesday as all three indexes oscillated between modest gains and losses throughout the session, but finished higher for the day. All the indexes are on course for monthly, quarterly, and annual gains.
Focus will now be on the S&P 500. A closing above the January record close of 4796.56 would confirm the bellwether index entered a bull market after it hit the bear market closing trough in October 2022.
Traders will be closely monitoring the weekly jobless claims due at 8:30 a.m. ET as it is the last catalyst to influence the direction of markets before the end of 2023.
Optimism around early rate cuts with a possible soft landing for the American economy next year, and the artificial intelligence frenzy powered a rally in U.S. stocks in 2023, but fears of the economy slowing more sharply still persist as the full effect of higher borrowing costs filters through.
“Goldilocks is being counted on to make an appearance next year, with inflation cooling but the US economy staying warm enough, though there is still a risk that the bears return to prowl again,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
Money markets have priced in an 86% probability that policymakers will reduce the Fed funds target rate by at least 25 basis points at the conclusion of their March policy meeting, according to CME’s FedWatch tool.
At 6:13 a.m. ET, were down 49 points, or 0.13%, were up 0.75 points, or 0.02%, and were up 37.75 points, or 0.22%.
Among individual stocks, U.S.-listed shares of Chinese companies rose in premarket trading as China’s blue-chip stocks staged their biggest jump in five months on Thursday on strong foreign inflows.
Shares of Alibaba (NYSE:) Holdings, PDD Holdings and JD (NASDAQ:).Com Inc advanced between 1.4% and 3.7%.
