On Friday, stock futures on Wall Street went up slightly, but for the week, they were set to have losses. This drop came after the federal reserve board of governors indicated that it plans to keep interest rates higher for a longer period of time.
S&P 500 futures increased by around 0.3%, while the Dow Jones Industrial Average futures went up by 0.1%. Nasdaq 100 futures rose by about 0.5%. This followed significant declines in all three major stock indexes on Thursday.
Investors became cautious as they considered how the Fed’s decision to keep borrowing costs high to control inflation would affect consumer and business demand. The Fed’s chair, Jerome Powell, also didn’t provide much optimism about the US economy avoiding a recession.
However, it seems that stocks are stabilizing now, with the S&P 500 expected to recover after experiencing its worst day since March in the previous session. Additionally, the yield on the 10-year Treasury, which had reached its highest level in over 15 years on Thursday, steadied.
Later, there will be updates on US manufacturing and services activity in September from S&P Global. This data will contribute to the ongoing debate about whether the Fed can achieve a “soft landing” for the economy.
In other central bank news, the Bank of Japan decided to keep its ultra-low interest rates in place on Friday and pledged to continue supporting the economy. This suggests that there won’t be any changes to its large stimulus program. As a result, the Japanese yen’s value dropped against the US dollar.
On the corporate side, Activision Blizzard’s shares rose, nearing Microsoft’s offer price, after the UK antitrust regulator indicated that the $69 billion acquisition could proceed.
There were also ongoing strikes affecting the auto sector and Hollywood. The United Auto Workers (UAW) threatened to escalate strikes against GM, Ford, and Stellantis, with a deadline on Friday. Meanwhile, negotiations between the major studios — Warner Bros. Discovery, Disney, Netflix, and NBCUniversal — and striking writers failed to reach an agreement despite lengthy discussions.