U.S. Stock Futures Rise as Hopes of Interest Rate Cut Grow

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ICARO Media Group
Politics
05/05/2024 22h45

U.S. stock futures showed positive signs on Sunday evening, following a week of gains for the major averages. The Dow Jones Industrial Average futures climbed 67 points, or 0.2%, while the S&P 500 and Nasdaq-100 futures each added 0.2%.

Last week, the Dow and Nasdaq saw increases of 1.1% and 1.4% respectively, while the S&P 500 gained 0.5%. These gains were attributed to a weaker-than-expected jobs report, which created optimism of a potential interest rate cut by the Federal Reserve.

The recently released nonfarm payrolls data revealed that the U.S. economy added fewer jobs than anticipated in April, resulting in an increase in unemployment. This data eased concerns about an overheating economy and fueled expectations that the Federal Reserve may begin lowering interest rates sooner than initially expected.

Bill Adams, the chief economist at Comerica Bank, commented on the situation, saying, "It feels a little early to declare that the U.S. economy has made a soft landing since the Fed still is holding interest rates at restrictive levels. But the April jobs report helps clear a path to that destination."

In other news, Berkshire Hathaway, led by Warren Buffett, disclosed during their annual shareholder meeting on Saturday that they reduced their stake in Apple by 13%.

As the first-quarter earnings season draws to a close, investors will continue to monitor key companies reporting this week. On Tuesday, Dow member Disney is set to release its earnings, while Uber is scheduled to report on Wednesday.

Barclays' Emmanuel Cau noted in a Friday note that "earnings beats have rebounded in Q1, helped by margins. While misses got punished, overall earnings resilience has likely limited the downside for equities."

On the economic front, both Richmond Fed president Tom Barkin and New York Fed president John Williams are scheduled to speak on Monday.

Overall, with positive signs seen in U.S. stock futures, investors remain optimistic about the potential for an interest rate cut and closely watch for further market trends and economic updates.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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