Stocks ready to bounce back after sell-off sparked by Fed’s Powell comments

U.S. stock index futures rose on Thursday, pointing to a rebound on Wall Street after  tanking a day earlier when the Federal Reserve dampened hopes of a lengthy easing cycle following a 25-basis-point rate cut.

Around 7 a.m. ET, Dow Jones Industrial Average futures indicated a gain of more than 70 points at the open. Futures on the S&P 500 and Nasdaq 100 also rose.

The U.S. central bank cut interest rates for the first time in more than a decade on Wednesday, citing “global developments” along with “muted inflation” as reasons for easing monetary conditions.

However, Chairman Jerome Powell told reporters in a news conference following the Federal Open Market Committee’s rate decision that the central bank’s rate cut was a “midcycle adjustment,” hinting that further rate cuts later this year were not a sure thing.


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In a series of posts on Twitter, President Donald Trump said Powell had “let us down ” by not clearly signalling more rate cuts.

The Fed operates independently of the White House. During a press conference, Powell said the central bank would never move rates because of political factors or to prove its independence.

Meanwhile, the U.S. and China ended a brief round of trade talks, without achieving much progress in ending their protracted dispute.

The world’s two largest economies have been engaged in a trade war since last year. In that time, they’ve slapped tariffs on billions of dollars’ worth of each other’s goods.

On the data front, the latest weekly jobless claims will be released at around 8:30 a.m. ET.

The closely watched ISM manufacturing index for July, manufacturing Purchasing Managers’ Index (PMI) data for July, construction spending figures for June, and the latest reading of light vehicle sales will follow later in the session.

Source: cnbc.com | Original Link

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