Fri Sep 20 07:31:48 UTC 2024: ## US Stock Futures Dip Despite Record Rally, Fed Rate Cut Fuels Optimism

**New York, October 6, 2023** – US stock futures edged lower on Friday, following a record-breaking rally on Wall Street the previous day. While the Federal Reserve’s sizable interest rate cut fueled investor appetite for tech stocks and other risky assets, the positive sentiment was slightly tempered by cautious optimism.

The Dow futures contract shed 32 points or 0.1%, S&P 500 futures dropped by 10 points or 0.2%, and Nasdaq 100 futures shed 49 points or 0.2%.

Thursday’s surge in equities was driven by the Fed’s decision to slash borrowing costs by 50 basis points, signaling the start of an easing cycle. The benchmark S&P 500 gained 95 points or 1.7%, the tech-heavy Nasdaq Composite added 441 points or 2.5%, and the Dow Jones Industrial Average advanced by 522 points or 1.3%.

Strengthening this positive outlook was a report showing a four-month low in weekly jobless claims, which fell below economists’ estimates. This fueled hopes that the lower interest rates would support labor demand without sparking a resurgence in inflation.

“For the time being, fundamental news flow is still favorable (disinflation, resilient growth, rate cuts, and healthy corporate performance), which should keep a bid beneath stocks,” analysts at Vital Knowledge stated.

**Central Bank Decisions and Corporate News**

Meanwhile, the Bank of Japan kept interest rates unchanged, as widely expected, while upgrading its outlook for consumption. Despite this, the BOJ cautioned about “high uncertainties” surrounding Japanese economic activity and prices.

Nike shares rose in after-hours trading after the company announced the upcoming departure of CEO John Donahoe, who will be replaced by Elliott Hill on October 14. Donahoe’s departure comes amid concerns about Nike’s eroding market share due to new competitors.

FedEx shares, however, sank in extended hours trading after the logistics group cut its full-year guidance and reported disappointing fiscal first-quarter earnings.

**Oil Prices Stabilize**

Crude prices dipped lower on Friday but remained on track for a second consecutive weekly gain, supported by the Fed’s rate cut and easing demand concerns. The benchmarks have recovered after falling to near three-year lows on Sept. 10.

While the latest government data showed a one-year low in US crude inventories, persistent concerns over slowing demand, particularly in China, continue to temper price gains.

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