U.S. stock futures were mixed ahead of the open Thursday, with tech stocks leading the way up following the Federal Reserve’s latest interest rate hike.
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Futures tied to the S&P 500 (^GSPC) added 0.4%, while futures on the Dow Jones Industrial Average (^DJI) lagged, dipping 0.4%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) rose by 1.2%.
The yield on the benchmark 10-year U.S. Treasury note ticked up to 3.415% Thursday morning. The dollar index was flat.
The major U.S. stock averages closed higher on Wednesday following the Federal Reserve’s highly anticipated rate hike to 25 basis points, which represented another slowdown in its inflation-fighting campaign. Chairman Jerome Powell’s upbeat comments on the state of inflation moved markets higher.
The Fed’s decision follows recent economic data that shows more evidence of decelerating inflation over the past few months, though Powell stressed the Fed’s campaign is far from over.
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WASHINGTON, DC – FEBRUARY 01: Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting on February 01, 2023 in Washington, DC. The Federal Reserve announced a 0.25 percentage point interest rate increase to a range of 4.50% to 4.75%. (Photo by Kevin Dietsch/Getty Images)
The macro picture was mixed on Wednesday, with ISM’s latest manufacturing PMI declining and missing consensus expectations. Meanwhile, private payrolls added 106,000 jobs in January, down from the 170,000 expected by economists.
The next major event on the macroeconomic front is January’s jobs report on Friday, which will be critical for investors to further assess if there’s evidence of an easing labor market.
December’s jobs report showed that the labor market remains strong, as employers added a robust 233,000 jobs for the month and an average monthly increase of 375,000 throughout last year.
On the earnings front, Meta Platforms (META) reported fourth quarter results after the bell that topped revenue expectations, while delivering a $5 billion expense cut. It also announced a $40 billion stock buyback. Shares of the social media giant surged nearly 20% in pre-market trading.
The S&P 500’s most heavily weighted components — Amazon (AMZN), Apple (AAPL), Alphabet (GOOG) — are gearing up to report quarterly results on Thursday after the bell.
Overall, fourth-quarter earnings season seems to be improving, noted Andrew Tyler, US Market Intelligence team at JP Morgan. But he said the question remains: “Will investors chase the soft landing narrative and the current rally?”
Elsewhere in markets, Carvana (CVNA) shares rallied 15% Thursday morning, bringing the online used-car seller’s year-to-date gains to nearly 200%.
Meanwhile, overseas, the Bank of England lifted interest rates by 0.5% to 4%, the highest level in 14 years. The increase from 3.5% was highly expected by economists. It’s the bank’s 10th consecutive rate hike as it continues trying to tame record high inflation.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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