Investing.com-- U.S. stock index futures steadied in evening deals on Wednesday after Wall Street surged to record highs on Donald Trump winning the 2024 presidential election, with focus now shifting to the Federal Reserve.
The central bank is widely expected to cut interest rates on Thursday. But its outlook on the path of interest rates is a point of uncertainty for investors.
Futures steadied after Wall Street rallied to record highs on Wednesday, as investors cheered the prospect of lower corporate taxes under Trump, while the possibility of a Republican sweep in Congress presented a clear path for major policy changes.
Sentiment was also buoyed by stronger-than-expected PMI data.
S&P 500 Futures steadied at 5,690.0 points, while Nasdaq 100 Futures rose 0.1% to 20,909.75 points by 18:31 ET (23:31 GMT). Dow Jones Futures rose 0.1% to 43,923.0 points.
Wall St scales record high on Trump victory
Wall Street indexes shot up on Wednesday after several networks declared Trump as the winner in the 2024 presidential elections. The former president had maintained a clear lead over Kamala Harris from the early counting of votes.
The Republicans won a majority in the Senate and also held a slim majority in the House of Representatives, with the prospect of a “red sweep” potentially giving Trump an easy path to enact sweeping policy changes.
Trump is widely expected to enact more inflationary policies, given his largely protectionist stances on immigration and trade. The dollar and Treasury yields rose sharply on this notion, although their gains did little to deter Wall Street.
The S&P 500 jumped 2.5% to a record high of 5,929.04 points on Wednesday, while the NASDAQ Composite rose 2.9% to a record-high 18,978.65 points. The Dow Jones Industrial Average surged 3.6% to 43,729.93 points, with the index logging its best day since 2022.
Some positive chipmaker earnings also buoyed sentiment, after prints from GlobalFoundries Inc (NASDAQ:GFS) and Qualcomm Incorporated (NASDAQ:QCOM) beat expectations. Qualcomm rose nearly 7% in aftermarket trade, while GlobalFoundries added 0.5%, with Reuters reporting that the latter was poised to win government support from the CHIPS Act.
Fed awaited for more cues on interest rates
Gains on Wall Street now appeared to be cooling before the conclusion of a Fed meeting on Thursday, where the central bank is widely expected to cut interest rates by 25 basis points.
But the bank’s outlook on interest rates remained a point of uncertainty, especially as recent data showed stickiness in inflation.
Investors were seen sharply dialing back expectations for lower interest rates in the long-term, especially as Trump won a second term.