Stock futures were little changed Sunday night as investors looked to support stocks at record highs now that the U.S. Federal Reserve signaled that interest rate cuts are coming.
S&P 500 futures rose 0.06%, along with Nasdaq 100 futures. Dow Jones Industrial Average futures were up about 19 points, or 0.05%.
Stocks are headed higher after a strong week highlighted by comments from Federal Reserve Chairman Jerome Powell that an interest rate cut was imminent. Wall Street had been eagerly awaiting the rate cut, especially in light of some worrying economic data that sparked a sell-off in early August, raising investor concerns that higher borrowing costs could hurt the U.S. economy.
But stocks have since rebounded and are now hovering near all-time highs. Friday’s close for the benchmark S&P 500 left the broader market less than 1% from its record highs hit in mid-July. The recovery has extended to the broader market, with the Russell 2000 index of small companies adding 3% after Powell’s comments.
Powell's comments are supporting the market through the end of the year, making it difficult to expect a retest of this month's lows, said David Russell, head of global market strategy at TradeStation.
Powell did not indicate when or how much he might cut rates. However, traders remain broadly aligned in their expectations for a rate cut at the Fed’s September policy meeting, according to the CME Group’s FedWatch tool.
On the economic front, initial jobless claims are due out on Thursday at 8:30 a.m., followed by the July personal consumption expenditures reading on Friday.
The Dow Jones Industrial Average rose 462.30 points, or 1.14%, to close Friday at 41,175.08. The S&P 500 closed up 63.97 points, or 1.15%, to 5,634.61. The Nasdaq Composite Index rose 258.44 points, or 1.47%, to close at 17,877.79.
During the week's trading ending at the end of Friday's session, the Dow Jones Industrial Average rose by 1.27%, while the S&P 500 achieved weekly gains of 1.45%, and the Nasdaq Composite Index rose during the week by 1.4%.
