Dow Futures Rise: Will the Fed’s Rate Cut Drive a Lasting Recovery? Traders Await Powell’s Update

Other notable movers include Jabil, which surged 8% on stronger-than-expected fiscal Q1 results and upgraded full-year guidance. Xometry gained 4.6% after JPMorgan highlighted its growth potential, while Birkenstock rose 2% on robust quarterly earnings. Nissan jumped sharply following reports of a possible merger with Honda, adding momentum to automaker stocks.

What Will the Fed’s Decision Mean for Markets?

At 19:00 GMT, the Federal Reserve is widely expected to announce a 0.25% rate cut, with a 95% probability priced into futures markets. However, traders will closely analyze the Fed’s updated economic projections and Fed Chair Jerome Powell’s press conference for signals on the policy outlook for 2024.

Analysts predict the Fed may adopt a hawkish tone to temper expectations for additional rate cuts in the coming year, given persistent inflationary pressures. While this could trigger immediate market volatility, historical patterns suggest that such moves often reverse within days.

Market Forecast: Is the Rebound Sustainable?

The Dow’s recovery hinges on the Fed’s messaging and its implications for interest-rate-sensitive sectors. A hawkish tone could limit upside potential, especially for value-oriented stocks. However, the resilience of technology and growth sectors suggests broader market indices are likely to remain supported.