S&P 500 futures break 6,000 as Trump victory rally, rate cuts cool By Reuters
Written by Lisa Pauline Mattackal
(Reuters) – US stock index futures eased lower on Friday, taking a breather after a sharp rally fueled by Trump’s landslide victory and an expected interest rate cut took the upper 6,000 mark for the first time.
It passed a key psychological milestone on Thursday on expectations of an easier regulatory regime under President-elect Donald Trump, with lower borrowing costs boosting sentiment.
The Fed lowered the rate by 25 basis points as Chairman Jerome Powell said the outcome of the election would not have an “imminent” impact on monetary policy.
“Stronger wages and economic growth, coupled with a stronger ‘Fed put,’ (are) expected to continue to lift the market over the medium term,” said Michael Brown, senior research strategist at Pepperstone.
“Standing clean after stakeholders hedged their books before the election, and expectations for Trump’s expected tax cuts and fiscal stimulus, are helping to drive the risks at stake.”
However, Trump’s expansionary spending plans and proposed tax hikes could raise inflation, complicating the Fed’s policy path.
A Fed official said the central bank will begin to measure the impact on its twin goals of stable inflation and high employment when the new administration’s proposals begin to emerge.
Traders have already adjusted expectations for a rate cut next year, and bond yields have jumped to multi-month highs.
Still, the immediate impact on Wall Street was muted as all three major indexes closed at record highs on Thursday.
The Dow is also set for its best week in nearly a year, while the Nasdaq is on track for its best week in two months.
Dow E-minis were down 17 points, or 0.04%, S&P 500 E-minis were down 10.5 points, or 0.17% and E-minis were down 83.75 points, or 0.39%.
Shares of chipmaker Nvidia (NASDAQ: ) eased 1% in market trading, after the AI pioneer became the first in history to surpass 3.6 trillion in market value on Thursday.
Airbnb fell 5.3% after missing third-quarter profit estimates, while Pinterest (NYSE: ) fell 12.2% after a disappointing revenue forecast.
Listings of Chinese companies in the US have lost momentum after investors were left unsettled by the government’s latest financial support measures. JD (NASDAQ:).com fell 4.2% as well Alibaba (NYSE: ) fell 3.8%.
Investors were also looking for a “Red Sweep” as the Republicans were determined to maintain their narrow lead in the House of Representatives after winning control of the Senate. That will make it easier for Trump to implement his legislative agenda.
Preliminary data from the University of Michigan’s November consumer sentiment survey will be due later in the day, and Federal Reserve Board Governor Michelle Bowman is expected to speak.
