US stock futures were trading higher in Thursday’s trade, 17 September, as a rally in Treasuries and a drop in crude oil prices lent support to the market a day after the Federal Reserve raised interest rates for the first time since 2023.
Futures for the S&P 500 rose 0.8%, while those for the Dow Jones Nasdaq 100 climbed 0.7% and 1.1% respectively. The gains in futures came after Wall Street closed lower on Wednesday, with the S&P 500 falling 0.5% and the Dow Jones Industrial Average declining 1.2%.
The Federal Open Market Committee voted unanimously to raise the benchmark interest rate to a range of 3.75% to 4% on Wednesday.
The much-anticipated rate hike eased pressure on Treasuries, with the benchmark 10-year Treasury yield falling 2 basis points to 4.986%. The 30-year Treasury yield was down 1 basis point at 5.333%, while the yield on the 2-year note slipped 1 basis point to 4.715%.
New policy projections showed that 16 of the 18 policymakers anticipate at least one more quarter-percentage-point hike by the end of this year, while only two expect rates to remain at current levels. Warsh, apparently, again did not submit a rate projection.
In his remarks to reporters, Fed Chair Kevin Warsh reiterated his concerns over inflation, saying too many categories of products and services were showing annualised price gains above 3% on both a six- and 12-month basis.
At the same time, the Fed Chair said the US economy remained strong, pointing to solid GDP growth, higher consumer spending and lower jobless claims as signs of resilience in economic activity.
The Fed’s decision to raise rates also came despite pressure from US President Donald Trump, who recently threatened to escalate his trade wars if the central bank did not lower interest rates. On Sunday, he repeated his argument that US borrowing costs should be the lowest in the world.
Oil prices extend losses
Oil prices eased in trade, extending their losses as reports of additional Saudi crude cargoes being shipped through Oman eased supply concerns. However, prices remained above $100 a barrel amid fears that the widening Middle East conflict could further disrupt supplies, Reuters reported.
Brent crude futures fell $1.50, or 1.42%, to $104.33 a barrel, while US West Texas Intermediate futures declined $1.09, or 1.06%, to $101.34 a barrel. Both contracts had fallen by about $3 on Wednesday.
The latest easing in supply concerns came after Saudi Arabia offered additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port, people familiar with the matter told Reuters. The move could help offset some of the disruption caused by attacks on the East-West pipeline to the Red Sea.
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