According to Yahoo News, U.S. stock index futures experienced a slight increase on Thursday, as investors anticipated a report that could support the narrative of easing inflation and the end of the Federal Reserve's rate hiking cycle. The three main indexes are on track for their best November since 2020, with the S&P 500 and the tech-heavy Nasdaq also set for their largest monthly gains since July 2022. Factors such as cooling price pressures, dovish comments from some Fed officials, and strong quarterly earnings have all contributed to the recent equities rally.
Wall Street closed marginally lower on Wednesday after conflicting policy rate remarks from multiple Fed officials. However, recent economic data indicating slowing inflation has kept hopes of peaking interest rates alive. Investors will be closely watching the personal consumption expenditure (PCE) index for October, due at 8:30 a.m. ET, which is expected to show that inflation eased in the previous month. The PCE index could play a significant role in determining whether Wall Street ends November on a high note or a low one, according to Russ Mould, investment director at AJ Bell.
Although a pause in rate hikes has been fully priced in for the upcoming December meeting, focus has increasingly shifted towards potential rate cuts next year. Traders are pricing in a 46.3% chance of at least a 25-basis point cut as soon as March 2024, based on CME Group's FedWatch tool. Additionally, investors will be keeping an eye on the weekly jobless claims numbers for the week ended Nov. 25 and the Chicago purchasing managers' index (PMI) for November, both due later in the day.