Following the significant sell-off experienced late in the prior session, stocks are poised for a rebound in early trading today. Futures are indicating a commendable recovery for the markets, with the S&P 500 futures up by 0.8%.
Investors might be engaging in bargain hunting, trying to acquire stocks at lower prices after the sharp declines observed yesterday.
On Wednesday, the Dow fell for the tenth consecutive session, marking its longest losing streak since 1974. This blue-chip index reached its lowest closing level in over a month, and the broader S&P 500 also ended the day at a one-month low.
Yesterday's downturn in the markets was triggered by the Federal Reserve's expected decision to cut interest rates by a quarter point; however, they projected fewer rate cuts in the upcoming year than previously anticipated.
Despite the strength of the U.S. economy influencing the Fed’s cautious approach towards further rate cuts, the economic outlook remained positive, driven by a series of mostly upbeat economic data releases.
The Commerce Department released data this morning detailing an unexpected surge in the U.S. economic growth pace for the third quarter, exceeding prior estimates. The report revealed that the gross domestic product (GDP) rose by 3.1%, up from the previously reported 2.8% increase. Economists had anticipated no change in growth pace.
The Labor Department published another report indicating a larger than expected decline in first-time claims for unemployment benefits for the week ending December 14th. Initial claims dropped to 220,000, down 22,000 from the previous week's unrevised level of 242,000, surpassing the economists' forecast of 230,000.
After the market opens, the National Association of Realtors is scheduled to release its report concerning November’s existing home sales, with expectations for a rise to an annual rate of 4.07 million from October’s rate of 3.96 million.
Additionally, the Conference Board is set to publish its report on November’s leading economic indicators, with expectations of a slight decline by 0.1%, following the 0.4% drop in October.
Stocks initially showed modest strength on Wednesday but dropped sharply following the Federal Reserve's policy announcement. All major indices ended the day sharply lower, with the Dow's losing streak extending to ten sessions.
By the end of the day, the major averages closed near session lows. The Dow plunged 1,123.03 points, or 2.6%, to 42,326.87; the Nasdaq dropped 716.37 points, or 3.6%, to 19,392.69; and the S&P 500 fell 178.45 points, or 3.0%, to 5,872.16.
In overseas markets, stock exchanges across the Asia-Pacific region mostly trended lower on Thursday. Japan's Nikkei 225 Index fell by 0.7%, while China's Shanghai Composite Index declined by 0.4%.
European markets have also moved downwards today. The German DAX Index decreased by 0.9%, and the French CAC 40 Index along with the U.K.'s FTSE 100 Index both slipped by 1.0%.
In the commodities sphere, crude oil futures are slightly down by $0.02 to $70.56 a barrel after a $0.50 increase on Wednesday. Meanwhile, gold futures have tumbled $41.40 to $2,611.90 an ounce after a previous decline of $8.70.
On the currency front, the U.S. dollar is trading at 156.77 yen, compared to 154.80 yen at yesterday’s close in New York. Against the euro, the dollar is valued at $1.0408, up from yesterday's $1.0353.
The material has been provided by InstaForex Company -
www.instaforex.com
