U.S. futures rise after first Fed rate hike since 2023

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U.S. futures rise

Highlights

Dow, S&P 500, and Nasdaq-100 futures rose.
Wall Street is attempting to recover from the Fed-driven selloff.
Lower oil prices are easing some pressure on equities.

Dow Jones Industrial Average futures rose 412 points, or 0.79%, to 52,327, while S&P 500 futures gained 0.85% to 7,687.75 and Nasdaq-100 futures climbed 1.13% to 29,587. The market was attempting to recover after the Federal Reserve raised interest rates, CNBC reported.

Futures rebound after Fed shock

Wednesday’s session ended under pressure after the Fed lifted the federal funds target range by 25 basis points to 3.75%-4%. It was the central bank’s first rate increase in three years, and policymakers indicated that another increase could follow before the end of 2026 as inflation remains elevated.

The Dow fell more than 630 points, or 1.2%, during the previous session, with financial stocks weighing on the index. The S&P 500 declined 0.5%, while the Nasdaq Composite finished marginally lower.

Thursday’s futures move reversed part of those losses, with Nasdaq-100 contracts posting the strongest percentage gain among the three major benchmarks.

Falling oil prices ease some pressure

Energy markets provided some relief for equities. U.S. crude fell more than 1.5% toward $100 a barrel, while Brent dropped more than 2% to around $103.48.

Lower oil prices could temper concerns that energy costs will add another layer of inflationary pressure just as the Fed moves back toward tighter monetary policy. The prospect of additional rate increases remains a central risk for stocks, particularly rate-sensitive sectors.

Overseas markets were mixed to higher. Japan’s Nikkei 225 finished 0.33% higher, while South Korea’s Kospi was little changed and China’s CSI 300 declined 0.45%. In Europe, the Stoxx 600 gained about 0.5% in early trading, with Britain’s FTSE 100 and Germany’s DAX also up roughly 0.5%.

Economic data becomes the next test

Attention now turns to U.S. weekly jobless claims and August housing starts. Both releases could influence expectations for the Fed’s next move by providing fresh evidence on labor-market conditions and the impact of higher borrowing costs on construction.

Thursday’s rebound shows that investors are willing to return to equities after the initial Fed reaction, but monetary policy remains a constraint. With the policy rate now at 3.75%-4% and another increase possible this year, incoming economic and inflation data will determine whether the recovery can extend beyond an early futures bounce.

We have previously highlighted that the Fed raises rates and signals more tightening ahead.

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