Stock Market News: Dow Set to Open Up Amid Hope for Fed Rate Cuts
U.S. stock futures were rising and bond yields were retreating on Friday. Investors have been fretting about elevated interest rates for weeks, but the past few days have boosted hopes that the Federal Reserve will be able to cut borrowing costs at some point this year.
The mood on Wall Street has been improving since Wednesday’s consumer price index report showed core inflation had cooled last month, and Fed governor Christopher Waller gave the market another reason to be cheerful Thursday when he signaled that the central bank could slash rates three or four times this year if the data play ball.
Waller “sounded open to a rate cut as soon as March…Those comments pushed back against the more hawkish narrative that developed because of strong data like the jobs report last week,” Deutsche Bank analyst Jim Reid said Friday.
Futures tracking the blue-chip U.S. indexes were pointing to small gains after a rotation out of the “Magnificent Seven” Big Tech stocks dragged all three benchmarks lower on Thursday. Dow Jones Industrial Average futures climbed 169 points, or 0.4%. Contracts tied to the S&P 500 were also up 0.4%, while Nasdaq 100 futures were rising 0.5%.
Bond yields were retreating again after Waller boosted the market’s hopes of rate cuts. Yields on the benchmark 10-year U.S. Treasury note were down 2 basis points to 4.60%.
Friday marks the final trading session of Joe Biden’s presidency, with markets set to be closed for Martin Luther King Jr. Day on Jan. 20, which happens to coincide with Donald Trump’s inauguration.