US stock futures gained modestly Thursday as December trading began with a tailwind from Fed Chairman Jerome Powell’s indication of a slowdown in the pace and magnitude of rate hikes as soon as this month.
Futures tied to the S & P 500 (^GSPC) and technology-heavy Nasdaq Composite (^IXIC) rose about 0.2%, while those on the Dow Jones Industrial Average traded just above parity. Elsewhere in the market, the US dollar index retreated from a three-month low, and US Treasury yields held steady after sharp declines.
Filings for unemployment insurance fell last week, holding near historic lows. Initial jobless claims, the most timely snapshot of the labor market, came in at 225,000 for the week ended Nov. 26, a decrease of 16,000 from the previous week’s revised level, Labor Department figures showed Thursday.
Thursday’s moves followed a breakout across the major averages in the previous session on the heels of a speech by Powell in Washington, DC, where he signaled US central bank officials may scale back the final interest rate hike of the year later this month. base 50. points. Wednesday saw the S&P 500 rebound 3.1%, the Dow rose 2%, or more than 700 points – and exit a bear market – and the Nasdaq rose 4.4%.
“It makes sense to moderate the pace of our rate hikes as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said, speaking at the Brookings Institution, even as he acknowledged the “uncertain delay” in most monetary savings. “The time to moderate the pace of rate hikes may come as soon as the December meeting.”
Powell’s comments are likely to be his last public remarks before Federal Reserve officials enter a blackout period – a time when policymakers are restricted from speaking publicly before a policy meeting – ahead of their next meeting on Dec. 13-14.
“The focus now should not be on the pace, but how much higher rates will need to go and how long they will need to stay there,” Jason England, global bond portfolio manager at Janus Henderson Investors said in a note. “As the Fed will need to see ‘considerably more evidence’ that inflation is decreasing before pausing and Powell ended his speech by saying ‘strongly cautions against premature policy loosening,’ the price cut is too early.”
Sentiment received a boost Thursday from easing concerns about China’s zero-covid-19 crisis after government officials Vice Premier Sun Chunlan called for an “optimization” of the nation’s virus response as the pathogen weakens.
Meanwhile on the corporate side, all eyes were on Salesforce ( CRM ) following news that Co-Chief Executive Officer Bret Taylor would step down in January and co-founder Marc Benioff would become sole CEO. Shares fell more than 7% pre-market.
Shares of Snowflake ( SNOW ) also fell in extended trading after the company’s fourth-quarter product revenue forecast missed estimates on an expected slowdown in technology spending. The stock was down about 4% before the open.
Alexandra Semenova is a reporter for Yahoo Finance. Follow him on Twitter @alexandraandnyc
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