March 27, 2023

Brighton Journal

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Stock futures are rising as investors assess the possibility of higher interest rates

Stock futures are rising as investors assess the possibility of higher interest rates

Stock futures rose on Friday as investors continued to assess earnings reports and tougher language from Federal Reserve speakers.

Futures linked to the Dow Jones Industrial Average rose 80 points, or 0.2%. S&P 500 futures rose 0.4%, while Nasdaq-100 futures rose 0.5%.

All major averages are on track for losing weeks – this week the Dow Jones is down 0.6%, while the S&P and Nasdaq are down 1.2% and 1.6%, respectively. However, all three are positive for this month.

Ross Stores and Palo Alto Networks popped up After the two companies announced their latest quarterly results. Investors also seemed to be elated by Gap’s latest results.

Friday’s moves came after a bearish session on Wall Street after comments from Federal Reserve officials raised concerns about tightening US monetary policy.

St. Louis Federal Reserve Chairman James Bullard Thursday said that “The policy rate is not yet in an area that can be considered sufficiently restrictive.” He noted that the appropriate area for the federal funds rate could be in the 5% to 7% range, which is above market pricing.

Investors have responded to every new bit of economic data or any language in recent weeks that could indicate what the Fed will do next with regard to interest rates, said Shelby McFadden, investment analyst at Motley Fool Asset Management. In this case, she said, the comments on inflation led investors to think that the Fed didn’t think the economy had cooled enough.

“There has been a thirst for relief and a push and pull,” she said of the investor response in recent days. “But at the end of the day, it really just depends on whether this period of inflation becomes slower than rampant, and on what the Fed decides to do next.”

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