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Stock futures were rising Wednesday, with investors increasingly sure the Federal Reserve is going to cut interest rates next month following weaker-than-expected retail sales data.
Futures tracking the Dow Jones Industrial Average rose 122 points, or 0.3%. S&P 500 futures gained 0.4%, and contracts tied to the tech-heavy Nasdaq 100 advanced 0.5%.
Each of the three major indexes rallied on Tuesday, with the Dow jumping more than 660 points after two economic data points for September appeared to strengthen the case for the Fed to lower rates at its Dec. 9-10 policy meeting. Retail sales figures came in weaker than expected, and the producer price index climbed in line with economists’ forecasts.
“The latest batch of U.S. data kept the path open to a December rate cut,” Deutsche Bank macro strategist Henry Allen said.
“Those headlines collectively saw investors become increasingly confident about another Fed rate cut in two weeks’ time… So that proved supportive for risk assets, which have been clearly trading around the Fed lately,” he added.
The yield on the 10-year Treasury note climbed 1 basis point to 4.01% on Wednesday. The dollar ticked up 0.1% against a weighted basket of its peers, and gold futures climbed 0.5% to $4,162 an ounce.
The British pound climbed 0.1% to $1.32, and the 10-year gilt yield climbed 1 basis point to 4.51% ahead of the U.K. government budget. Finance minister Rachel Reeves is expected to hike some taxes as she bids to plug a fiscal hole, as lawmakers try to banish the memory of former Prime Minister Liz Truss’ ill-fated September 2022 mini-budget, which drove up gilt yields and sent the pound plummeting.
