The major U.S. index futures are currently pointing to a higher open on Thursday, with the Nasdaq 100 futures showing a particularly strong move to the upside.
A surge by shares of Meta Platforms (META) is likely to contribute to an early rally by the Nasdaq, as the Facebook parent is skyrocketing by 19.9 percent in pre-market trading.
The spike by Meta comes after the company reported better than expected fourth quarter revenues and announced a $40 billion stock buyback.
Stocks may also continue to benefit from a positive reaction to the Federal Reserve's interest rate announcement on Wednesday, with traders expressing optimism the Fed is nearing the end of its rate hiking cycle.
Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.
Stocks moved sharply higher late in the trading session on Wednesday, as traders reacted positively to the Federal Reserve's monetary policy announcement. With the upward move, the Nasdaq and the S&P 500 reached their best closing levels in four months.
The major averages all finished the day in positive territory, although the Dow inched up just 6.92 points or less than a tenth of a percent to 34,092.96. The Nasdaq surged 231.77 points or 2.0 percent to 11,816.32, while the S&P 500 jumped 42.61 points or 1.1 percent to 4,119.21.
The late-day rally on Wall Street came even as the Federal Reserve announced its widely expected decision to raise interest rates by another quarter point and signaled further rate hikes.
After a two-day meeting, the Fed said it has decided to raise the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent.
The latest interest rate hike comes after the central bank raised rates by 75 basis points in November and by 50 basis points in December.
The Fed also said it anticipates ongoing increases in interest rates will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
During his post-meeting press conference, Fed Chair Jerome Powell said the central bank does not believe rates are yet at a sufficiently restrictive policy stance and suggested a "couple of more rate hikes" will be needed to get to that level.
The next monetary policy meeting is scheduled for March 21-22, with CME Group's FedWatch Tool currently indicating an 81.8 percent chance the Fed will raise rates by another 25 basis points.
Ahead of the Fed announcement, payroll processor ADP released a report showing private sector job growth slowed by more than expected in the month of January.
ADP said private sector employment climbed by 106,000 jobs in January after surging by an upwardly revised 253,000 jobs in December.
Economists had expected private sector employment to increase by 178,000 jobs compared to the addition of 235,000 jobs originally reported for the previous month.
A separate report released by the Institute for Supply Management showed activity in the U.S. manufacturing sector contracted for the third consecutive month in January.
The ISM said its manufacturing PMI dipped to 47.4 in January from 48.4 in December, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 48.0.
Semiconductor stocks turned in some of the market's best performances on the day, with the Philadelphia Semiconductor Index spiking by 5.2 percent to a five-month closing high.
Chipmaker Advanced Micro Devices (AMD) helped lead the sector higher, skyrocketing by 12.6 percent after reporting better than expected fourth quarter results.
Substantial strength was also visible among transportation stocks, as reflected by the 3.8 percent surge by the Dow Jones Transportation Average.
Software, computer hardware and gold stocks also saw considerable strength, while gold stocks moved sharply lower along with the price of crude oil.
Commodity, Currency Markets
Crude oil futures are falling $0.38 to $76.03 a barrel after plunging $2.46 to $76.41 barrel on Wednesday. Meanwhile, after edging down $2.50 to $1,942.80 an ounce in the previous session, gold futures are jumping $23.30 to $1,966.10 an ounce.
On the currency front, the U.S. dollar is trading at 128.29 yen versus the 128.98 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0980 compared to yesterday's $1.0990.
Asia
Asian shares edged higher on Thursday after the U.S. Federal Reserve said the "disinflationary process has started" but "ongoing increases" in interest rates will be needed to curb price pressures.
Fed Chair Jerome Powell's dovish comments in a press conference stoked expectations that the Fed might start cutting rates before 2024.
Chinese shares ended little changed as investors awaited a slew of earnings from prominent firms in the coming weeks.
The benchmark Shanghai Composite Index finished marginally higher at 3,285.67 after a volatile session. Hong Kong's Hang Seng Index slipped 0.5 percent to 21,958.36.
Japanese shares ended a tad higher despite a stronger yen weighing on exporters. The Nikkei 225 Index inched up 0.2 percent to 27,402.05, with technology stocks leading the uptick. The broader Topix ended 0.4 percent lower at 1,965.17.
Tokyo Electron, Screen Holdings and Advantest jumped 3-4 percent. Technology investor SoftBank Group added 1 percent and Uniqlo brand owner Fast Retailing gained 2.5 percent.
Automakers Honda Motor, Toyota Motor and Nissan fell 1-2 percent. Sumitomo Chemical plunged 8.5 percent after cutting its full-year earnings guidance.
Seoul stocks ended notably higher, with the Kospi climbing 0.7 percent to 2,468.88, led by tech stocks. Samsung Electronics soared 2.8 percent and SK Hynix rallied 2.2 percent.
Investors shrugged off data showing that South Korean consumer inflation ticked up in January to a three-month high.
Australian markets rose slightly as firmer bullion prices boosted gold miners. Tech stocks also jumped, while energy stocks fell, tracking lower oil prices.
The benchmark S&P/ASX 200 Index edged up 0.1 percent to 7,511.60 and the broader All Ordinaries index closed 0.2 percent higher at 7,728.50.
Europe
European stocks are mostly higher on Thursday, as investors react to dovish comments from Federal Reserve Chair Jerome Powell as well as interest rate hikes by the European Central Bank and the Bank of England.
The European Central Bank and the Bank of England both raised interest rates by 50 basis points, as was widely expected.
While the German DAX Index has surged by 1.6 percent, the U.K.'s FTSE 100 Index is up by 0.9 percent and the French CAC 40 Index is up by 0.8 percent.
Swiss wealth management firm Julius Baer has surged after it closed its 2020-22 business cycle by hitting all its financial targets.
Banco Santander has also moved sharply higher after it achieved a record attributable profit of €9,605 million in 2022.
Shell has also moved to the upside. The oil & gas giant launched a $4 billion share buyback program after reporting record annual profits.
Wizz Air Holdings has also jumped after saying it carried 4,149,850 passengers in January, an increase of 73.1 percent from last year.
Semiconductor manufacturer Infineon has also soared after posting higher profits and revenues for its first quarter.
Medical device maker Siemens Healthineers has also moved sharply higher after confirming its guidance for full-year revenue growth.
On the other hand, Sweden's Electrolux has shown a substantial move to the downside after predicting lower sales volumes in 2023.
ING has also tumbled after issuing disappointing guidance for 2023, while German lender Deutsche Bank has slumped after its pre-tax profit came in below expectations.
U.S. Economic Reports
The Labor Department released a report on Thursday unexpectedly showing another modest decrease by first-time claims for U.S. unemployment benefits in the week ended January 28th.
The report said initial jobless claims edged down to 183,000, a decrease of 3,000 from the previous week's unrevised level of 186,000. The dip surprised economists, who had expected jobless claims to climb to 200,000.
With the unexpected decrease, jobless claims fell to their lowest level since hitting 181,000 in the week ended April 23, 2022.
The Labor Department said the less volatile four-week moving average also slipped to 191,750, a decrease of 5,750 from the previous week's unrevised average of 197,500.
A separate report released by the Labor Department showed U.S. labor productivity surged by more than expected in the fourth quarter of 2022.
The Labor Department said labor productivity spiked by 3.0 percent in the fourth quarter after jumping by an upwardly revised 1.4 percent in the third quarter.
Economists had expected labor productivity to shoot up by 2.4 percent compared to the 0.8 percent increase that had been reported for the previous quarter.
The report also showed unit labor costs jumped by 1.1 percent in the fourth quarter after surging by a downwardly revised 2.0 percent in the third quarter.
Unit labor costs were expected leap by 1.5 percent compared to the 2.4 percent spike that had been reported for the previous quarter.
At 10 am ET, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of December. Factory orders are expected to surge by 2.3 percent in December after tumbling by 1.8 percent in November.
Stocks In Focus
Shares of Align Technology (ALGN) are soaring in pre-market trading after the maker of Invisalign braces reported fourth quarter results that beat analyst estimates on both the top and bottom lines.
Shipping giant FedEx (FDX) is also likely to see initial strength after Citi and Bank of American both upgraded their ratings on the company's stock to Buy from Neutral.
On the other hand, shares of Honeywell (HON) may come under pressure after the conglomerate reported weaker than expected fourth quarter revenues.
For comments and feedback contact: editorial@rttnews.com