U.S. stock futures signaled a weaker start on Thursday, suggesting markets may surrender some of the gains notched in the previous session.
Oracle (NYSE:ORCL) is expected to be a major headwind at the open, with shares tumbling 13.1% in premarket trade after the tech firm delivered mixed quarterly results — earnings ahead of expectations but revenue coming up short.
The slide spilled over into other artificial intelligence–linked names. Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) were both under pressure before the bell, hinting at renewed caution over lofty AI-related valuations.
Investors are also recalibrating expectations for interest rates following the Federal Reserve’s latest policy announcement. While the central bank cut rates by 25 basis points on Wednesday, as anticipated, policymakers were divided over the outlook for additional easing, injecting fresh uncertainty into the market.
Stocks drifted for much of Wednesday’s session before turning higher late in the afternoon after the Fed’s decision. All three major indices finished the day in positive territory, reversing Tuesday’s hesitant performance.
The Dow surged 497.46 points, or 1.1%, to 48,057.75. The S&P 500 gained 46.17 points, or 0.7%, to 6,886.68, while the Nasdaq advanced 77.67 points, or 0.3%, to close at 23,654.16.
Markets reacted to the Fed’s announcement that it had approved a third consecutive quarter-point rate cut, reducing the federal funds target range to 3.50%–3.75%. However, the decision exposed significant divisions on the Federal Open Market Committee — the first time three dissents have surfaced since September 2019.
Fed Governor Stephen Miran pushed for a 50-basis-point reduction, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid preferred to maintain current rates.
The Fed’s economic projections signaled similarly uneven views, with the median forecast calling for one more rate cut in 2026, but the so-called dot plot showing widely varied expectations — ranging from rates as low as 2.0%–2.25% to estimates above the current level.
Those contrasting viewpoints highlight the challenge the Fed faces in balancing its mandate for maximum employment and stable 2% inflation.
Despite the policy split, some traders are positioning for a more dovish environment ahead — particularly as markets anticipate a leadership shift under President Donald Trump.
“We’re not surprised to see near term optimism in the markets given that the Fed continues to cut rates even though the economy is growing,” said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He continued, “However, we think the rose colored glasses may come off once investors realize that the path to lower interest rates may take longer – or may not materialize at all – to the extent that they believe it will.”
Rate-sensitive stocks jumped after the Fed’s announcement. Housing names rallied sharply, lifting the Philadelphia Housing Sector Index 3.1%. Transportation stocks also showed notable strength, with the Dow Jones Transportation Average rising 2.7%.
Banks, hardware makers, and pharmaceuticals also traded higher, while software names lagged and moved broadly lower.
Leave a Reply