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U.S. equity futures moved higher Thursday, while the dollar slipped against its global peers and Treasury yields steadied, as investors reacted to a mixed set of messages from Federal Reserve Chairman Jerome Powell and eyed the release of Apple’s latest quarterly earnings after the closing bell.
Stocks powered higher in the afternoon session on May 1 but gave up most of those gains over the final hour of trading following the Fed’s two-day policy meeting.
The central bank held rates steady at between 5.25% and 5.5% and said it needed more time and data before it could gain confidence that inflation is returning to its 2% target.
The hawkish stance reflected, however, a caveat: Powell’s rejection of a pending rate hike, which alongside plans to slow the pace of Treasury bond sales from its $7.4 trillion balance sheet triggered the market’s initial bullishness.
“I think it’s unlikely that the next policy rate move will be a hike. I would say it’s unlikely,” Powell told reporters in Washington. “You know, our policy focus is really what I just mentioned … which is how long to keep policy restrictive.”
Apple will post earnings after the close of trading Thursday, with investors looking for a big drop in iPhone sales.
When markets did return to the “how long” portion of his remarks, however, stocks gave back nearly all their late-session gains as bets on a Fed rate cut between now and the latter part of the year faded quickly.
That said, with benchmark 2-year note yields falling from around 5.04% just before the Fed rate decision to around 4.929% in early New York trading, stocks have a smoother runway heading into the Thursday session ahead of jobless claims and factory orders data prior to the opening bell.
Futures contacts tied to the S&P 500 are priced for a 34 point gain at the start, while those linked to the Dow Jones Industrial Average suggest a 170 point advance.
Related: Fed faces fine-line walk between inflation hawk and slow-growth realist
The tech-focused Nasdaq, which is the most sensitive to interest-rate changes, is called 160 points higher, with Apple (AAPL) earnings slated for after the close.
Apple shares were marked 1% higher in premarket trading at $171.02 but are still down more than 10% for the year as investors worry that slumping iPhone sales and a lack of AI ambitions will hold back gains over the coming quarters.
In overseas markets, Europe’s Stoxx 600 slipped 0.23% in Frankfurt, with Novo Nordisk, the Danish drugmaker that introduced weight-loss treatments Ozempic and Wegovy, falling 2.7% despite blockbuster sales and an improved profit forecast.
Shell shares, meanwhile, rose 1.05% in London, helping the FTSE 100 to a 0.32% gain, after the oil giant posted stronger-than-expected first-quarter earnings of $7.7 billion and unveiled plans for a $3.5 billion buyback.
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Overnight in Asia, a surprise move higher in the yen ignited talk of currency-market intervention from Japan’s Ministry of Finance. But the gains were short-lived and the yen was last marked at 155.29 against the U.S. dollar.
The Nikkei 225, meanwhile, ended 0.09% lower in Tokyo, while the regionwide MSCI ex-Japan benchmark rose 0.6%. Stocks in China were closed for the annual Labor Day celebrations.
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