Dow Futures Remain Stable After Reaching New High on Fed Rate Cut News
Dow Jones Industrial Average futures went flat on Sunday evening as the interest rate cut last week, and sent the blue-chip index to a record high. The Dow futures lost a meager 12 points and traded relatively flat. The S&P 500 futures barely moved and Nasdaq 100 futures did not budge at all.
Today’s stability comes off the back of a very strong week on Wall Street, buoyed by news of the Federal Reserve cutting interest rates by 50 basis points-the first such slash in four years. Although there had been some fluctuation in the stock market in the past days immediately following the news, it was at an all-time high by the end of the week.
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The Dow finished Friday at an all-time high, above 42,000 points. The S&P 500 and Nasdaq also were up by more than 1% for the week; the S&P 500 records new highs as well.
According to Ronald Temple, the chief market strategist at Lazard in his statement on friday, “This rate cut shows that the Fed will move promptly to defend the economy. This week’s rate cut shows the Fed will step in if the labor market gets too weak,”. A 50 basis point cut isn’t going to drastically change the economy on a short-term basis. It sends a powerful message, and the markets reacted that way.
Looking to the week ahead, investors will be looking toward key economic reports on the service and manufacturing sectors. Speeches by several Federal Reserve presidents-the list includes Raphael Bostic of Atlanta, Austan Goolsbee of Chicago, and Neel Kashkari of Minneapolis-could offer some insight into what the Fed might do next.
