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U.S. stock futures rose on Thursday as investors looked to recoup some of yesterday's selloff sparked by Federal Reserve Chair Jerome Powell's hawkish comments and expected another round of tech gains from the Magnificent 7 after the bell. closing.
stocks were hit hard late in the session on Wednesday when Powell, following the Federal Reserve's decision to keep interest rates steady at a 22-year high of between 5.25% and 5.5%, rejected the market bets that the central bank would begin to ease rates. the next few months.
Powell told reporters in Washington that the economy is “a long way” from a soft landing, where inflation pressures are eased and recession is avoided, highlighting the resilient labor market, strong year-end economic growth and elevated pressures. about prices.
“Based on today's meeting, I would tell you that I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that,” Powell said.
“When you ask me about 'in the short term,' what I hear is March,” he added. “I would say I don't think that's the most likely case, or what we would call the base case.”
Traders are now pricing in just a 35% chance that the Federal Reserve will begin the first of its three projected rate cuts in March, according to CME Group's FedWatch, although the odds of cuts in May are pegged at around 95%. .
The prospect of higher rates for a longer period pushed the US dollar index 0.35% higher to 103.632 against a basket of its global currency pairs in overnight trading, although Treasury yields eased. remained largely stable.
Benchmark 10-year bonds were pegged at 3.946% at the start of the New York session, with 2-year bonds at 4.241% even after an increase in auction sizes tied to the Treasury's quarterly refund report.
On Wall Street, investors are likely to refocus on the Magnificent 7 tech stocks, which have fueled much of the S&P 500's 3.25% gain so far this year. Apple (AAPL) – Get a free reportAmazon (AMZN) – Get a free report and metaplatforms (GOAL) – Get a free report all are scheduled to report December quarter earnings after the closing bell.
Related: Apple lags behind its Mag 7 rivals in a key area that analysts say could support profits
Analysts expect Apple to earn $2.10 per share on revenue of $117.9 billion, but its near-term outlook is likely to be much more important to the stock's performance.
Wall Street expects Meta to post a bottom line of $4.95 per share, a three-fold improvement over the fourth quarter of 2022, with revenue up about 21% to $39.14 billion.
For Amazon, analysts expect the e-commerce giant will likely post record revenue of $166.1 billion, a staggering total driven in part by 13.1% sales growth at Amazon Web Services, with profits of around $29.3 billion. of dollars.
On Wall Street, stocks are set for a modestly positive opening to start the month, with weekly jobless claims data at 8:30 a.m. ET followed by manufacturing activity data 90 minutes later.
Futures contracts tied to the S&P 500 indicate an opening gain of 21 points, while those tied to the Dow Jones Industrial Average are priced up 55 points. The technology-focused Nasdaq is trading 110 points higher.
Overnight in Asia, stocks followed Wall Street's late-session declines, with Japan's Nikkei 225 falling 0.76% and the MSCI regional index excluding Japan marking a 0.07% decline.
In Europe, the benchmark Stoxx 600 index fell 0.2% in early Frankfurt trading after inflation data showed price pressures eased to 2.8% in January, a drop from the level of the 2.9% registered at the end of last year.
In Britain, the FTSE 100 rose 0.36% following the Bank of England's January policy decision in London, which left its key borrowing costs unchanged at 5.25% following a 6-3 vote in its committee. rate setting.
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