Stock futures edge higher after Powell boosts expectations for Fed rate cut

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Federal Reserve Chairman Jerome Powell

Stock-index futures pointed to a higher start for Wall Street Thursday, attempting to build on gains that saw the Nasdaq Composite end in record territory after Federal Reserve Chairman Jerome Powell reinforced expectations for a rate cut later this month.

Powell, who testified Wednesday before the House Financial Services Committee, will appear before the Senate Banking Committee on Thursday.

What are major benchmarks doing?

Futures for the Dow Jones Industrial Average YMU19, +0.31%  rose 38 points, or 0.1%, to 26,898, while S&P 500 futures ESU19, +0.21%  were 5.1 points higher at 3,002.50, a gain of 0.2%. Nasdaq-100 futures NQU19, +0.22%  rose 16 points, or 0.2%, to 7,944.75.

The Nasdaq Composite Index COMP, +0.75% Wednesday gained 60.80 points, or 0.8%, closing out the session at a record 8,202.53. The Dow Jones Industrial Average DJIA, +0.29% added 76.71 points, or 0.3%, to finish at 26,860.20, while the S&P 500 SPX, +0.45% closed 13.44 points higher, up 0.5%, at 2,993.07. The S&P 500 jumped above 3,000 in early trade Wednesday, it’s first time above that milestone.

Read: S&P 500 index tops 3,000 for first time — here’s how the stock market got here and what it means

What’s driving the market?

Investors cheered remarks Wednesday by Powell, who told House lawmakers that uncertainty around trade tensions and the global economic outlook has continued since the Fed’s June policy meeting. Powell’s testimony was seen affirming expectations the central bank will move to cut rates when policy makers meet at the end of the month.

“Markets were in buoyant mood on Thursday as Fed Chairman Jerome Powell gave his strongest indication yet that the Federal Reserve will slash interest rates at the July 30-31 meeting,” said Raffi Boyadjian, senior investment analyst at XM, in a note.

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Powell’s remarks were followed by minutes of the Fed’s June policy meeting and showed that “many” officials had expressed support for a future interest-rate move if concerns about the economic outlook continued.

Read: Fed minutes of June meeting bolster sense of imminent interest-rate cut

Investors will also continue to pay close attention to the developments on the trade front, with the Washington Post reporting that the Trump administration is growing concerned about prospects for a trade deal with China.

Meanwhile, the Trump administration is launching an investigation into France’s proposed tax on internet giants like Google parent Alphabet Inc. GOOG, +1.39% GOOGL, +1.48% Amazon.com Inc. AMZN, +1.46%  and Facebook Inc. FB, +1.77% U.S. Trade Representative Robert Lighthizer’s agency will investigate the tax under Section 301 of the Trade Act of 1974 — the same provision it used last year to investigate China’s technology policies, leading to tariffs on $250 billion worth of Chinese imports, the Associated Press reported.

Powell will have the opportunity to fine-tune his message when he appears before the Senate panel at 10 a.m. Eastern Time. Separately, Fed Vice Chairman Randal Quarles is set to take part in a conversation at the Bipartisan Policy Center at 1:30 p.m. Eastern, while New York Fed President John Williams is due to speak at the University of Albany at the same time.

Meanwhile, the June consumer-price index is due at 8:30 a.m. Eastern. Economists surveyed by MarketWatch expect a flat reading after a 0.1% rise in May. Core CPI, which strips out volatile food and energy prices, is forecast to rise 0.2% after a 0.1% increase in May.

Jobless-claims data are also due at 8:30 a.m., with economists looking for first-time claims to come in at 221,000 for the week ended July 6, unchanged from the previous week.