Stock Futures Rise as Wall Street Finds Relief in a Patient Fed
New York (Sept 22) Stock futures moved higher on Thursday as relief over a patient Federal Reserve fueled market gains for a second day.
S&P 500 futures were up 0.29%, Dow Jones Industrial Average futures increased 0.27%, and Nasdaq futures rose 0.29%.
The Nasdaq hit a new record close and the S&P 500 and Dow rallied on Wednesday after the Fed opted not to raise interest rates for another month. Fed Chair Janet Yellen reiterated a cautious approach to future rate increases, even though she argued that the case for an interest rate hike had strengthened.
The majority of investors are now pricing in the likelihood of a December rate hike. Chances are now at 52%, according to CME Group fed funds futures, up from 48% before the announcement on Wednesday.
"The Fed appears to be positioning for a hike in December, and at this stage we see that outcome as more likely than not," BNP Paribas analysts wrote in a note. "Saying it is waiting for more evidence in the time being, despite the case for a rate hike having strengthened, suggests that barring significant events the rate hike will not be long in coming."
Jabil Circuit (JBL) climbed in premarket trading after besting quarterly estimates for profit and sales. The circuit maker earned 28 cents a share, 3 cents above estimates, while revenue of $4.4 billion exceeded consensus of $4.27 billion. Fiscal first-quarter profit also met estimates.
Red Hat (RHT) increased more than 7% after boosting guidance in the wake of a better-than-expected quarter. The developer of open-source platform Linux expects per-share earnings between $2.23 and $2.25 a share for the full year, up from a previous range of $2.19 to $2.23 a share. Chief Financial Officer Frank Calderoi credited the company's recent quarterly performance with a "record number of deals over $1 million" and overall solid demand.