Stock Futures Slightly Higher Following a “Jumbo” Interest Rate Hike From the Fed

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Quattro M Securities Inc. Finance Broker New York City
Quattro M Securities Inc. Finance Broker New York City

U.S. stock futures slightly surged on Thursday morning following a big plunge in the major averages as traders swallowed another large rate hike from the Federal Reserve.

Dow Jones Industrial Average futures added 83 points, or 0.3%. S&P 500 futures and Nasdaq 100 futures gained about 0.2% apiece.

On Wednesday, the Dow Jones Industrial Average fell 522 points, or 1.70%.The S&P 500 lost 1.71%, and the Nasdaq Composite shed 1.79%. The big plunge came amid a  volatile period after the Fed’s third consecutive 0.75 percentage point rate increase. At one point the Dow was up more than 300 points.

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Still, stocks closed lower, continuing the recent selloff trend as investors evaluated the Fed’s latest comments. Policymakers insisted on hiking rates as high as 4.6% in 2023 before pulling back in the fight against inflation, spurring fears on Wall Street that the economy could fall into a recession.

The central bank expects to raise its year-end rate to 4.4% in 2022, continuing aggressive action against rising prices through the remainder of the year. 

“I think they should slow down,” DoubleLine Capital CEO Jeffrey Gundlach said Wednesday on CNBC’s “Closing Bell: Overtime.” “Monetary policy has lags that are long and variable, but we’ve been tightening now for a while,” he added, noting that the impact of the tightening could lead to a recession.

On the economic front, the latest data on weekly jobless claims is expected Thursday at 8:30 a.m. ET.