US stock market futures climbed early Thursday morning after the Federal Reserve reiterated its commitment to continue raising interest rates to reduce inflation.
Futures on the Dow Jones Industrial Average (DJIA) gained 0.15%, while those on the S&P 500 (SPX) rose 0.19%, as of 6:13 a.m. EST, Thursday. Meanwhile, the Nasdaq has 100 (NDX) futures were up 0.18%.
What happened on the stock market on Wednesday
The Dow fell 0.5% during Wednesday’s regular trading session, breaking its five-day gain. The S&P 500 and Nasdaq also posted losses of 0.72% and 1.21% respectively at the closing bell.
The market was in turmoil on Wednesday after the Fed said it plans to continue raising interest rates until inflation falls to about 2%. Recall that inflation, according to the July consumer price index, was 8.5%, far from the Fed’s target rate. This means there is still a long way to go before the Fed ends its policy-tightening campaign.
However, the Fed also said that the pace of its policy tightening, with each cycle, will depend on concurrent market conditions. However, investors expecting a slight easing from the Fed’s stance amid cooler inflation in July were not convinced. The market still largely expects an increase of 75 basis points in the September round.
In addition, Target (TGT) income miss and Lowe’s (LOW) mixed quarterly results added to the concerns of investors, who are now anxiously awaiting more retail profits this week.
More economic data awaits
Later on Thursday, existing July home sales data will be released by the National Association of Realtors amid a cooling housing market.
Due to the high mortgage interest, buying a house has become unfeasible. In addition, high construction prices and construction costs had led to a decline in new construction in July. Sellers have cut prices in many areas, but prices are still significantly above last year’s price level.
In addition, last week’s unemployment claims will also be released on Thursday. Recall that for the week ending August 5, weekly unemployment claims of 262,000 had continued to climb to hit their all-time high so far.