Investing.com-- U.S. stock index futures fell slightly in evening deals on Thursday after a bumper interest rate cut by the Federal Reserve and a rally in technology stocks powered Wall Street to record highs.
Weaker-than-expected earnings from FedEx Corporation (NYSE:FDX) weighed on sentiment, with the stock falling sharply in aftermarket trade.
Wall Street’s Thursday rally came after stock markets initially logged a mixed reaction to the Fed’s cut, given that Chair Jerome Powell presented a less dovish outlook for rates.
But with interest rates still set to fall sharply in the near-term, investors piled into risk-driven assets, with the battered technology sector seeing a bulk of the buying.
Still, futures showed that sentiment was cooling after Thursday’s rally, with anticipation of a Bank of Japan meeting on Friday spurring some cautious plays.
S&P 500 Futures fell 0.1% to 5,773.50 points, while Nasdaq 100 Futures fell 0.1% to 20,060.50 points by 19:35 ET (23:35 GMT). Dow Jones Futures rose slightly to 42,462.0 points.
Dow, S&P hit record highs after rate cut
The Dow Jones and the S&P 500 both closed at record highs on Thursday, with buying spurred largely by optimism over lower interest rates.
The Fed cut rates by 50 basis points- the upper end of market expectations- and kicked off an easing cycle that is widely expected to see rates drop by a total of 125 bps by the year-end.
The S&P 500 rose 1.7% to 5,713.64 points on Thursday, while the NASDAQ Composite surged 2.5% to 18,011.51 points. The Dow Jones Industrial Average rose 1.3% to 42,025.19 points.
Technology was the best-performing sector for the day, with market darling NVIDIA Corporation (NASDAQ:NVDA) rallying 4%.
Still, the Fed’s medium-to-long term outlook for rates appeared less dovish. Chair Powell said the central bank had no intention of enacting ultra-low rates, and that its neutral rate was likely to be much higher than seen in the past.
The outsized rate cut also raised questions about the state of the U.S. economy, amid recent signs of a severely cooling labor market.
Fedex slides on weak earnings, adds to economic concerns
Delivery and logistics giant FedEx slid 11% after logging substantially weaker-than-expected quarterly earnings.
The company was hit by customers shifting to cheaper, slower options, while industrial demand was also softer than expected.
FedEx is considered as a bellwether for the global economy, given its heavy exposure to trade. Its weak quarterly earnings also raise questions over a potential slowdown in activity.