U.S. stock futures edged higher on Thursday morning after the major indexes fell sharply as traders weighed another sharp rate hike from the Federal Reserve.
Dow Jones Industrial Average futures rose 110 points, or 0.36%. S&P 500 futures rose 0.27%, while Nasdaq 100 futures edged up 0.1%.
Stocks closed lower on Wednesday, extending a recent sell-off as investors assessed the latest comments from the Federal Reserve. The Dow Jones fell 522 points. The S&P 500 and Nasdaq Composite both fell more than 1.7%, leaving both averages at their lowest levels since June 30 and July 1, respectively. Stocks fell sharply after the Federal Reserve raised interest rates by 0.75 percentage points for the third time in a row.
Saira Malik, chief investment officer at Nuveen, said: “Yesterday’s FOMC meeting was a tough pill for the market to swallow, and I think that’s likely to continue for three reasons from the Fed.” He pointed to rising interest rates, inflation and unemployment.
Policymakers on Wednesday pledged to continue raising interest rates by as much as 4.6 percent in 2023 before pulling back to fight inflation, stoking fears on Wall Street that the economy could slip into recession as the central bank aims to slow growth.
The Fed is expected to raise its year-end interest rate to 4.4% in 2022, continuing to take aggressive action against rising prices for the rest of the year.
“I think they should slow down,” DoubleLine Capital CEO Jeffrey Gundlach said Wednesday on CNBC’s “Closing Bell: Overtime.” “Monetary policy has a long and volatile lag, but we have tightened for a while now,” he added, noting that the impact of tightening could lead to a recession.
On the economic front, the latest data on weekly jobless claims is expected at 8:30 a.m. ET on Thursday.