US stocks were poised to continue their retreat on Thursday as Wall Street debated the hawkish message sent out by the Federal Reserve alongside its decision to hold interest rates steady.
S&P 500 (^GSPC) futures were down about 0.7%, after losing almost 1% in the wake of Wednesday’s decision, while Dow Jones Industrial Average (^DJI) futures dropped nearly 0.5%. Nasdaq 100 futures fell around 0.9% to continue to lead the declines.
After combing through the central bank’s forecast, investors believe its policymakers see interest rates staying “higher for longer”, even though Chair Jerome Powell stressed policy will be dependent on economic data in his press conference.
At the center of the debate is just how long that “longer” will be, given the central bank signaled another hike at one of its final two meetings this year. Goldman Sachs has pushed back its forecast for a Fed rate cut to the fourth quarter of 2024.
The prospect of a prolonged period of elevated rates has spooked some investors, as that would put pressure on stocks and bonds. The yield on the benchmark 10-year Treasury rose on Thursday, at one point touching its highest level in over 15 years.
The Bank of England decided to hold interest rates steady on Thursday, pausing tightening after hiking 14 times in a row after an unexpected slowdown in inflation. Elsewhere in European central banks, there were a couple of surprises: the Swiss National Bank kept its rates on hold, while Norway’s central bank signaled it could follow September’s hike with another in December.
In individual stocks, shares of FedEx popped in premarket trading after a big quarterly profit beat.
Broadcom, Klaviyo, Nvidia: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Thursday:
Broadcom (AVGO): Broadcom’s shares fell by 6% in premarket trading after it was reported that Google executives had discussed dropping the company as a supplier of artificial intelligence chips by as early as 2027.
Klaviyo (KVYO): Shares in Klaviyo fell 3%, a day after the marketing automation firm made its stock market debut.
NVIDIA (NVDA): The chip giant’s shares were down 2%, as several rate-sensitive stocks took a hit after the Fed’s hawkish pause.
FedEx (FDX): Shares in FedEx were up 5%, a day after it posted a profit beat thanks in part to taking customers from rivals.
KStocks on track to fall further as Fed forecast sinks in
Wall Street stocks looked set to extend losses on Thursday as investors debated how long it could be before Fed policymakers cut interest rates from their elevated levels.
Futures tied to the Dow Jones Industrial Average (^DJI) were down 0.50%, or 175 points, while S&P 500 (^GSPC) futures lost 0.70%. Nasdaq 100 futures dropped 0.92%
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