Stock indices finished today’s trading session in the green as the Magnificent Seven continue to carry the market higher. Indeed, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 0.34%, 1.03%, and 1.56%, respectively.
Federal Reserve Chair Jerome Powell and Cleveland Fed President Loretta Mester both emphasized the need for caution in reducing interest rates, indicating that any potential cuts would depend on continued progress toward the Fed’s 2% inflation target. Powell, addressing the Senate Committee on Banking, Housing & Urban Affairs, reiterated that it is important to methodically approach rate reductions to avoid a re-acceleration of inflation.
Meanwhile, Mester warned against prematurely lowering rates, arguing that it could negate the efforts made to control inflation so far. She pointed to the strong labor market and economic growth, suggesting that the Fed could consider rate reductions later in the year if inflation demonstrates a steady decline. Additionally, Mester discussed the Fed’s strategy for managing its balance sheet, saying that the central bank intends to gradually reduce it.
U.S. futures inched lower on Thursday morning after yesterday’s strong trading session. Futures on the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down by 0.24%, 0.26%, and 0.38%, respectively, at 3.52 a.m. EST, March 7. All three major indices closed higher on Wednesday, buoyed by Fed chair Jerome Powell’s remarks on interest rate cuts.
During his two-day congressional appearances, Powell didn’t give any specific timeline for future interest rate cuts. However, his remarks suggested that the current rate range of 5.25% to 5.5% is likely the highest point. This reassured market participants, according to Jose Torres, senior economist at Interactive Brokers.
Today, investors would be looking ahead to Powell’s testimony to the Senate Banking Committee on Banking, Housing, and Urban Affairs. Furthermore, U.S. initial jobless claims for the week ended March 2 and Balance of Trade reports for January are scheduled for release later in the day.
On the corporate earnings front, retail chains Costco Wholesale (COST) and Kroger (KR) are slated to release quarterly earnings today. Also, Broadcom (AVGO), DocuSign (DOCU), Gap (GPS), and MongoDB (MDB) will be reporting their quarterly results.
In major stock news, New York Community Bancorp (NYCB) gained about 7% in regular trading yesterday as it secured $1 billion in capital. Meanwhile, shares of Victoria’s Secret (VSCO) fell over 26% on mixed Q4 results and weak guidance.
At the time of writing, the U.S. 10-year Treasury yield was up, floating near 4.11%. Meanwhile, WTI crude oil futures steadied, hovering near $78.95 per barrel as of the last check due to a smaller-than-expected increase in US crude inventories and positive Chinese trade data.
Elsewhere, European markets opened lower ahead of the European Central Bank’s (ECB) policy decision due today. The ECB is expected to maintain interest rates at record-high levels for the fourth consecutive time.
Asia Pacific Markets Ended Lower on Thursday
Asia-Pacific indices ended today’s trading session in the negative territory, in line with the weak investor sentiments in the U.S.
Hong Kong’s Hang Seng Index closed lower by 1.27%. Also, China’s Shanghai Composite and Shenzhen Component indices ended down by 0.41% and 1.37%, respectively. At the same time, Japan’s Nikkei and Topix indices finished lower by 1.23% and 0.44%, respectively.
Interested in more economic insights? Tune in to our LIVE webinar.
Disclosure
