Stock Market Today: US Futures Rise as Fed Rate Hike Fears Fade, with Apple on Deck - Latest Global News
Stock market today: US futures rise as Fed rate hike fears fade, with Apple on deck

Stock Market Today: US Futures Rise as Fed Rate Hike Fears Fade, with Apple on Deck

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U.S. stock futures rose on Thursday in a calm after the Fed’s daily storm, as investors put interest rate worries aside for now and focused on Apple’s (AAPL) earnings and its upcoming monthly jobs report.

Futures on the S&P 500 (^GSPC) rose about 0.7%, while those on the Dow Jones Industrial Average (^DJI) were 0.4% higher. Contracts on the tech-heavy Nasdaq 100 (^NDX) led the advance, up 0.9%.

Stocks are recovering from Wednesday’s volatile session, which was marked by the wait for the Federal Reserve’s monetary policy decision. Chairman Jerome Powell played down the likelihood of a rate hike, reassuring investors worried that recent signs of “stubborn” inflation could trigger the move.

Read more: What the Fed’s interest rate decision means for bank accounts, CDs, loans and credit cards

With Powell reiterating that the Fed still relies on data to influence its thinking, Friday’s April jobs report takes center stage. Wall Street is watching for signs of disruption in the strong labor market, a key factor for policymakers.

Meanwhile, the OECD cites U.S. outperformance as a reason for the global economy to grow faster than expected, providing another reason for optimism.

In terms of earnings, the focus is primarily on Apple’s quarterly results, which are expected after the market closes on Thursday. Wall Street is bracing for a revenue decline and a potentially significant decline in iPhone sales in China. However, megacap firm Magnificent Seven’s results could contain some potential bright spots.

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  • Bring your macro notes to Apple’s conference call tonight

    Most investors are expecting a weak quarter from Apple (AAPL) this afternoon.

    That’s why stocks are down 12% year-to-date, while the S&P 500 is up 5%.

    There is a strong focus on how the economic challenges in the US and China are affecting the powerful Apple. If these challenges prove to be a major problem for revenue, investors shouldn’t get too excited about the inevitable AI discussion on the earnings release.

    Helpful point from JP Morgan analyst Samik Chatterjee:

    “The mood [on Appl has improved despite tough datapoints as the focus has shifted to owning the potential AI upgrade cycle; however, the upcoming earnings print will still matter for investors in offering insights into the magnitude of the cyclical challenges on account of pressured consumer spending as well as the headwinds in relation to market share moderation in China.”

  • The pushback on rate hikes from the Fed

    The Street is singing in unison this morning on a growing narrative in markets: the Fed may actually hike rates this year to finally bring inflation down to its 2% goal.

    That song is that pigs have a better chance of flying than the Fed whipping out a rate increase.

    Good point on all of this from Mike O’Rourke at Jones Trading this morning after Wednesday’s Fed decision:

    “Fear hype that chairman Powell would put rate hikes back on the table was ludicrous. If there was ever a straw man catalyst for a rally, this was it. The speculation was as inane as the belief at the start of the year that the FOMC would cut interest rates six times this year. There was nothing in the data or the Fed commentary supporting such easing speculation, but somehow it became the consensus view and was actually priced into markets. Chairman Powell has been adamantly clear on repeated occasions that if inflation is resilient, the FOMC will hold rates steady for as long as necessary to rein in inflation. Beyond risking overtightening as some decelerating economic data emerges, there is also an election in six months. Most obviously, this is a man who took the Fed’s balance sheet from $4 trillion four years ago to $9 trillion, then today said he is tapering normalization at $7.4 trillion. Chairman Powell is only hawkish when he has no other choice, and currently inflation is keeping him in check. Raising interest rates aggressively a year late does not make one tough on inflation.”

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