Fed rate cut boosts futures as growth stocks lead gains By Reuters

(Reuters) – U.S. stock index futures rose on Thursday, with those tracking the Nasdaq climbing nearly 2 percent following the Federal Reserve’s move to start its easing cycle with a half-percentage-point cut, helping a soft landing for the world’s largest economy.

Rate-sensitive growth stocks such as Microsoft (NASDAQ: ), Meta (NASDAQ: ) and Alphabet (NASDAQ: ), which have led much of this year’s rally, advanced more than 1.5% each in premarket trading market.

Chip stocks also rose, with Nvidia (NASDAQ: ) up 2.8%, Advanced Micro Devices (NASDAQ: ) up 3% and Broadcom (NASDAQ: ) up 3.4%.

Futures that track the market-focused index also rose 2.5 percent to their highest level since July 31.

A lower interest rate environment could mean the prospect of cheaper operating costs and higher profits for companies that depend on credit.

At 4:59 a.m. ET, the Dow E-minis were up 398 points, or 0.96%, the E-minis were up 76.25 points, or 1.34%, and the E-minis were increased by 355.75 points or 1.82%.

After delivering its very large verdict on Thursday, the Fed assured that it was not an emergency response and unveiled forecasts that analysts say reflect the conditions for the economy to achieve a gold bullion scenario where growth is steady , and inflation and unemployment remain low.

Traders now see a 64.2 percent chance the central bank will cut interest rates by 25 basis points at its November meeting, according to CME Group’s (NASDAQ: ) FedWatch tool. The central bank is expected to cut rates by 72 bps by the end of the year, according to LSEG data.

On the data front, investors will look to weekly jobless claims and existing home sales for August.

Market reaction to the decision was muted, with all three indices closing slightly lower in the previous session.

However, 1970 data from Evercore ISI showed that the S&P 500 averaged a 14% gain in the six months following the first cut in a rate-cutting cycle.

September was an overall disappointing month for U.S. stocks, with the S&P 500 posting an average loss of 1.2% since 1928. The S&P 500 has posted losses so far this month, but is near record highs and the Dow- the blue-chip is just short. of its respective milestone.

JPMorgan Chase & Co (NYSE: ) rose 1.1%, Bank of America climbed 1.6%, Wells Fargo advanced 1.5% after the big banks cut their respective base rates. Citigroup also rose 1.5 percent after it cut its prime lending rate.

Dell (NYSE: ) added 2.8% after declaring a quarterly cash dividend.