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Investing.com — U.S. stock index futures fell in overnight trading Wednesday, following positive sentiment on Wall Street amid continued uncertainty over the scope and size of the Federal Reserve’s interest rate cuts. It was reversed.
Fed Chairman Jerome Powell said he would eventually cut rates in 2024, but noted the central bank needed more confidence that inflation was coming down. That belief was reinforced by separate comments from Minneapolis Fed President Neel Kashkari, who said he did not expect the Fed to cut rates more than once this year.
Wall Street indexes were rising on Wednesday after Chairman Powell’s comments sparked optimism about lower interest rates this year. However, futures prices barely carried on the positive momentum and sharply pared their early gains in response to Kashkari’s comments.
By 19:54 ET (00:54 GMT), it was down 0.2% to 5,103.00 points and down 0.3% to 18,991.0 points. It fell 0.1% to 38,655.00 points.
Kashkari expects perhaps one or two rate cuts in 2024
In an interview with WSJ Live, Governor Kashkari said he does not expect more than two rate cuts, or perhaps even one rate cut, in 2024.
He noted that the recent resilience of the U.S. economy could support U.S. inflation expectations and give the Fed room to raise interest rates.
Kashkari’s comments echo statements made by other Fed officials over the past two weeks that persistent inflation could undermine hopes for early interest rate cuts.
Rising long-term interest rates tend to put pressure on the economy and reduce corporate profits, while also making risk-driven assets such as stocks less attractive.
Statistics released on Friday are expected to provide further clues about the US economy.
Wall Street remains at record highs
Wall Street indexes, which plunged earlier this week due to heavy profit-taking in the technology sector, rose Wednesday to put record highs back in sight.
Tech stocks remained the biggest driver of U.S. stock indexes, especially as investors remained optimistic about the prospects for artificial intelligence.
It rose 0.5% to end at 5,104.76 points and rose nearly 0.6% to 16,031.54 points. It rose 0.2% to 38,661.05 points.
Victoria’s Secret plummets on aftermarket trading, OneSpan soars
Lingerie retailer Victoria’s Secret & Company (NYSE:) fell 20% in late trading after its 2024 outlook was weaker than expected.
Meanwhile, cybersecurity company OneSpan Inc. (NASDAQ:) soared nearly 30% after reporting a better-than-consensus quarterly profit.
new york community bancorp Inc (NYSE:) rose 1.2% as the recovery extended into aftermarket trading after the struggling regional company raised more than $1 billion in new capital.
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