In a surprise move, the U.S. Federal Reserve announced a half-percentage point reduction in interest rates, causing stock futures to rise on Wednesday night. Dow Jones Industrial Average futures increased by 100 points, or 0.2%. Similarly, futures linked to the S&P 500 and Nasdaq 100 climbed by 0.4% and 0.5% respectively.

The unexpected decision by the U.S. central bank to lower the overnight lending rate from 5.25% to 5.00% came as a surprise to some investors, who were critical of the size of the initial cut. This marks the first rate reduction delivered by the Fed in four years.

During Wednesday's trading session, stocks experienced volatility but ultimately closed lower. Initially, both the S&P 500 and Dow reached new record highs following the Fed's rate cut announcement. However, the market shifted downwards as Federal Reserve Chairman, Jerome Powell emphasized that this 50 basis point cut should not imply further substantial rate reductions in the near future, dampening expectations.

Tom Porcelli, Chief U.S. Economist at PGIM Fixed Income, believes Powell's comments had a significant impact on the market. Porcelli stated, "The market was thinking to itself, if you go 50, another 50 has a high likelihood. But I think he really dashed that idea to some extent." Powell's reluctance to commit to a predetermined path signaled caution and prudence on the part of the Federal Reserve.

Looking ahead, traders will closely watch the earnings reports of Darden Restaurants, FedEx and Lennar which are scheduled to be released on Thursday. Additionally, market participants will keep an eye on August's existing home sales and the latest weekly jobless claims, both of which could provide further insights into the health of the economy.

As the closing bell rang on Wednesday, stock futures continued to trade higher. Dow futures rose by 85 points, or 0.2%, shortly after 6 p.m. ET. Similarly, S&P 500 and Nasdaq 100 futures increased by 0.2% and 0.3% respectively. The market remains cautiously optimistic amidst uncertainties surrounding future rate cuts and ongoing economic indicators.