US stock futures continued to see a bright outlook after a strong performance yesterday. The market reacted to the Federal Reserve holding its key interest rate steady for the third consecutive time, while also setting the stage for cuts in 2024 as indicated on its dot plot.
Treasury yields experienced a significant drop as a result, with expectations pricing in the start of interest rate cuts in March.
The Federal Reserve’s view spurred a resurgence of optimism among investors and could encourage risk-taking, boosting stocks in the process.
Retail sales and initial jobless claims data, due today, could affect the market to a limited extent.
All sectors performed well yesterday, with utilities, healthcare, and real estate recording the strongest gains. Industries like biotechnology could benefit from the clear change in monetary policy direction as lower interest rates could help reduce the challenges facing companies focusing on long-term growth.
The real estate sector also saw a significant increase and was boosted by the projected interest rate cuts in 2024. Declining interest rates could help support the demand for real estate units in the US.
The technology sector recorded a softer increase, slightly tempered by Adobe’s decline following muted guidance for its 2024 earnings and revenue.