The leading stock indexes on Wall Street are expected to start the trading day on an upward trajectory, fueled by optimism that the U.S. Federal Reserve may have concluded its series of monetary policy tightening.
Encouraging corporate updates has also contributed to a more positive market mood.
On Wednesday, the Federal Reserve kept its interest rates unchanged, aligning with market predictions. Although Chairman Jerome Powell did not close the door on potential future tightening, he acknowledged the economic repercussions of the recent sharp increase in bond yields.
In terms of individual stocks, Qualcomm experienced a 5.7% surge in premarket trading. This increase came after the semiconductor company projected first-quarter sales and earnings that surpassed the expectations of Wall Street analysts, signalling a potential easing of the slowdown in smartphone sales.
PayPal experienced a 6.1% rise as the payment processing giant upgraded its forecast for the full-year adjusted earnings.
Starbucks witnessed a 5.5% increase after reporting quarterly comparable sales that exceeded forecasts, while Apple’s stock went up almost 1% in anticipation of the tech giant’s quarterly financial results, set to be released after the closing bell.
Looking at the broader market, the Dow Jones Industrial Average showed a 0.4% increase in premarket trading, while the S&P 500 and the Nasdaq 100 were up by 0.5% and 0.8%, respectively.
Oil prices ascended in tandem with the broader financial markets, responding positively to signals from the Federal Reserve that it might be pausing its interest rate increases.
Brent crude, a major global benchmark for oil prices, experienced a 1.4% increase, bringing its trading value to approximately $86 per barrel. This rise comes after a 5% decrease over the previous three trading sessions.
On Wednesday, the Federal Reserve decided against a second consecutive increase in borrowing costs and indicated that the recent uptrend in longer-term Treasury yields might lessen the need for further rate hikes.
This price increase in oil comes after it lost its premium that was established at the onset of the conflict between Israel and Hamas, as the turmoil has not extended throughout the Middle East up until now.
ING analysts Ewa Manthey and Warren Patterson highlighted in a report that the strength in Brent crude prices this morning is attributed to the positive economic outlook following the Federal Reserve’s decision to halt its interest rate increases.
