US stocks rose in premarket trading on Thursday as oil prices edged lower and an expected Fed rate hike on Wednesday offered some relief that the central bank was working to contain inflation.
Futures on the Dow Jones Industrial Average (YM=F) rose 0.7%, while those on the S&P 500 (ES=F) gained 0.7%. Contracts for the Nasdaq-100 (NQ=F) also rose 0.8%, rebounding from a slump on Wednesday.
Stocks recovered as investors assessed Federal Reserve Chairman Kevin Warsh’s hawkish rhetoric, which analysts said helped restore the Fed’s credibility on inflation. On Wednesday, the Federal Reserve raised interest rates by 25 basis points for the first time in three years and projected one more rate hike this year.
The decision drew ire from President Trump, who called for lower interest rates and said he spoke with Warsh ahead of the FOMC meeting. “You might as well vote with the board because it’s not going to matter,” Trump said he told Warsh.
Oil prices, meanwhile, ticked lower as US Energy Secretary Chris Wright said Saudi Arabia’s East-West pipeline, which has become a key alternative route for oil stuck in the Strait of Hormuz, would be restored soon. Brent crude (BZ=F), the global benchmark, changed hands at $104 per barrel.
Initial jobless claims and housing starts highlight Thursday’s economic calendar. The Bank of England will also issue its central bank policy decision.
LIVE 2 updates
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Good morning. Here’s what’s happening today.
Economic data: Philadelphia Fed business outlook, September (28.6 expected, 47.4 previously); Initial jobless claims, week ended Sept. 12 (206,000 previously); Continuing claims, week ended Sept. 5 (1.774 million previously); Housing starts, month-on-month, August (1.315 million expected, 1.239 million previously); Building permits, month-on-month, August preliminary reading (-0.9% expected, +4.3% previously)
Earnings calendar: No notable earnings.
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Oil extends slump as Saudi Arabia moves to restore key pipeline
Bloomberg reports:
Oil extended the biggest drop in more than six weeks on signs of easing Middle East supply disruptions, with a key pipeline being restored.
West Texas Intermediate fell toward $102 a barrel, after losing 3.2% on Wednesday, the most since Aug. 4, while Brent closed below $106. Saudi Arabia is seeking to return about half the capacity of its damaged East-West pipeline within days, and full operations in about six weeks, a person familiar said.
US Energy Secretary Chris Wright told Fox Business that 18 million barrels of crude and products went through the Strait of Hormuz earlier this week. The seven-day average of flows through the waterway — which links the Persian Gulf to global markets — was 11 million barrels a day, he said.
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