U.S. Stock Futures Decline After Fed's Hawkish Stance

U.S. stock index futures dipped on Thursday evening following Wall Street's steadying from the previous day's slump, triggered by the Federal Reserve's indication of a slower pace of rate easing for the next year.

The Fed reduced interest rates by 25 basis points on Wednesday; however, its forecast of fewer cuts in 2025 spurred a significant drop across all three major indexes.

• S&P 500 Futures slipped 0.2% to 5,922.0 points
• Nasdaq 100 Futures fell 0.3% to 21,312.55 points
• Dow Jones Futures edged down 0.2% to 42,709.0 points

Fed’s Hawkish Tilt Weighs, Investors Assess Weekly Jobs, Revised GDP

The Fed's latest cut brought the borrowing rate down to a range of 4.25%-4.50%, yet policymakers projected only two cuts in 2025 instead of the previously forecast four cuts.

Chair Jerome Powell indicated that additional reductions would hinge on progress toward managing persistent inflation, as policymakers adjust to possible economic changes under a new administration.

Traders now anticipate a solitary quarter-point reduction in 2025 due to persistent economic resilience and ongoing elevated inflation. Data released on Thursday revealed initial jobless claims fell more than expected, indicating a slow, gradual labor market downturn. Additionally, the U.S. economy grew faster than previously estimated in Q3, supporting the Fed's view of robust economic growth.

Wall Street Steadies After Slump, Government Shutdown Looms

Wall Street indexes rebounded earlier on Thursday following a slump, yet closed largely unchanged as investors digested the Fed's hawkish outlook. Anticipations of prolonged higher rates lead to sharp declines on Wednesday, particularly in the tech sector.

Technology stocks made some recovery but were still showing losses overall:
– NVIDIA Corporation (NASDAQ:NVDA) rose 1.3%
– Tesla Inc (NASDAQ:TSLA) fell nearly 1%
– Intel Corporation (NASDAQ:INTC) lost about 1.2%
– Broadcom Inc (NASDAQ:AVGO) shares dropped 2.3%
– Micron Technology Inc (NASDAQ:MU) plunged nearly 17% after disclosing weaker-than-expected earnings guidance.

The S&P 500 ticked down 0.1% to 5,867.08 points, while the NASDAQ Composite slightly declined to 19,369.58 points. The Dow Jones Industrial Average rose marginally to 42,342.24 points, narrowly missing its 11th successive decline.

On Thursday, the U.S. House of Representatives rejected a Republican-backed funding proposal aimed at averting a government shutdown. With government funding set to expire at midnight on Friday, a failure to meet the deadline could lead to a partial shutdown, impacting services ranging from border security to national parks and affecting over 2 million federal employees' pay. A potential shutdown may disrupt Christmas travel and various public services.