US pre-open: Futures head south after Wednesday's rate cut-fuelled rally

(Sharecast News) - Wall Street futures were in the red ahead of the bell on Thursday after major indices chalked up solid gains in the previous session on the back of the Federal Reserve's move to cut interest rates by 0.25%. As of 1240 GMT, Dow Jones futures were down 0.30%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.70% and 0.93% weaker, respectively.

The Dow closed 497.46 points higher on Wednesday after the Federal Open Market Committee, in its final meeting of 2025, voted 9-3 in favour of a rate cut, with the Federal Funds Rate being trimmed by 25 basis points to a range of 3.5% to 3.75%.

The decision was in line with analysts' expectations and similar to moves made in September and October, marking the sixth rate cut since September 2024 to bring borrowing costs to their lowest since 2022.

However, the scope of the dissent among policymakers was stark, with Austan Goolsbee and Jeff Schmid voting for no change to rates, while Trump-appointed Stephen Miran called for a 50bp reduction - marking the first time since 2019 that three FOMC members dissented.

The central bank also hinted at a slower pace of rate cuts going forward, with Fed chair Jerome Powell stating the central bank was "well positioned to wait and see how the economy evolves" as he noted that Donald Trump's so-called 'reciprocal' tariffs had been a driver of inflation.

AJ Bell's Russ Mould said: "The Federal Reserve's committee members do not see eye to eye. While the central bank proceeded with an interest rate cut, two voters weren't in favour and Trump's wing man Stephen Miran continues to push for deep cuts. It's not out of the ordinary to see different views but it does create a challenge for whoever takes over from Jerome Powell as Fed chair next year.

"The US has avoided recession, the jobs market is softer but not crumbling, and inflation is proving to be sticky so one might take the view that further rate cuts could be minimal. However, we have a president who is keen for rates to come down a lot to help drive the economy, and who is doing their very best to have greater sway over the central bank."

On the macro front, weekly jobless claims data from the Labour Department will be published at 1330 GMT, as will September goods trade balance figures, while September wholesale inventories numbers will follow at 1500 GMT.

In the corporate space, Broadcom, Costco and Lululemon were all slated to report quarterly earnings after the close.







Reporting by Iain Gilbert at Sharecast.com