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* Futures up: Dow 0.32%, S&P 0.50%, Nasdaq 0.67%
Nov 2 (Reuters) – Wall Street futures on Thursday got a
boost from hopes that the Federal Reserve had reached the end of
its tightening campaign, while a number of upbeat corporate
forecasts also lifted sentiment.
The Fed held interest rates steady on Wednesday, as
expected, and while Chair Jerome Powell left the door open to
further tightening, he also acknowledged the impact of a recent
surge in bond yields on the economy.
The comments, which were perceived to be dovish, sent U.S.
Treasury yields tumbling, with the benchmark 10-year yield
hitting a fresh two-week low.
That, in turn, fuelled gains in mega-cap growth stocks.
Microsoft, Nvidia and Tesla rose
between 0.8% and 2.2% in premarket trading on Thursday.
“Overall, markets interpreted the meeting to have been
dovish,” said Charu Chanana, market strategist at Saxo Markets
in a note.
“Given the weakening consumer and business confidence trends
and rising risks of delinquencies, the odds remain tilted to
suggest that we have reached an end of the Fed’s tightening
cycle.”
Traders pared back the risk of a December hike to about 20%
and a January move to 25%, according to the CME Group’s FedWatch
tool. They have also priced in a 70% chance that the tightening
is over.
U.S. equities have kicked off November on a brighter note —
after a gruelling October marred by fears of higher-for-longer
interest rates and geopolitical tensions — though a mixed bag
of earnings reports have kept a lid on sentiment.
However, with the third-quarter earnings season now well
beyond the halfway point, the more recent quarterly reports from
major Wall Street companies were upbeat.
Shares of Qualcomm climbed 4.7% after the chip
designer forecast first-quarter sales and profits above Wall
Street estimates as the slowdown in smartphone sales eases.
PayPal Holdings advanced 6.9% as the payments giant
raised its full-year adjusted profit forecast.
Apple’s results will grab the spotlight late on
Thursday, while Starbucks, Eli Lilly and
Marriott are due to report earnings before markets open.
Overall, analysts estimate S&P 500 companies’ profit rose 5%
in the third quarter, higher than the 1.6% growth forecast at
the start of October, per LSEG data.
Investors will also parse a report on factory orders for
September, due at 10 a.m. ET. The main data point of the week,
however, will be the October non-farm payrolls report on Friday,
which will offer more clarity on the state of the labor market.
At 5:14 a.m. ET, Dow e-minis were up 108 points, or
0.32%, S&P 500 e-minis were up 21.25 points, or 0.5%,
and Nasdaq 100 e-minis were up 99.25 points, or 0.67%.
SolarEdge Technologies dropped 18.4% following the
solar inverter maker’s downbeat fourth-quarter revenue outlook.
Albemarle slipped 4.6% as the lithium producer
trimmed its annual sales forecast.
(Reporting by Amruta Khandekar; Editing by Savio D’Souza)
