Stock futures experienced an increase on Wednesday night. This follows a rally in the major averages after the Federal Reserve reaffirmed its plan for two interest rate cuts in 2025.
Futures tied to the Dow Jones Industrial Average increased by 71 points, which is nearly 0.2%. S&P 500 futures rose by almost 0.3%, while Nasdaq 100 futures climbed approximately 0.4%.
Although the Fed maintained the federal funds rate within the range of 4.25% to 4.5% as widely expected, it also kept its forecast for two rate cuts in 2025 despite an economic outlook that anticipated higher inflation and lower economic growth.
Stocks climbed, recovering some ground lost during a market sell-off that has been ongoing since February. The Dow increased by 0.9%, the S&P 500 surged just over 1%, and the Nasdaq Composite gained 1.4%, though it remains in correction territory, meaning the index is still more than 10% below its high.
The S&P 500, which briefly dipped into correction territory last week, is now more than 7% below its record high. The broad market index is also on track to end a four-week losing streak.
Federal Reserve Chair Jerome Powell described the potential impact of tariffs on inflation as likely being short-lived or transitory.
“‘Transitory’ is back, or at least that was the implication. The market’s reaction suggests that investors are willing to believe that tariffs and other policies won’t create lasting inflationary pressures and that the Fed can remain in control,” said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management.
Earlier this month, President Donald Trump mentioned the economy might experience “a period of transition” due to his tariff policies affecting markets. He granted a reprieve from duties on select Canadian and Mexican imports, but this exemption is set to expire on April 2.
Investors will closely watch weekly jobless claims data on Thursday, along with the Philadelphia Fed’s manufacturing survey and a report on existing home sales.
— news from CNBC