Following a session of moderate losses due to late-day volatility, stocks are anticipated to show considerable strength in early trading on Thursday. Currently, major index futures suggest a sharply higher opening, with S&P 500 futures surging by 1.6%.
The significant upward momentum on Wall Street is driven by the Federal Reserve's recent decision to reduce interest rates by 50 basis points, announced on Wednesday. Fed officials have also indicated a likelihood of further rate cuts in the coming months and into the next year, fostering optimism about a potential economic soft landing.
Adding to the positive sentiment, the Labor Department released a report indicating that first-time claims for U.S. unemployment benefits unexpectedly dropped to a nearly four-month low in the week ending September 14th. Initial jobless claims fell to 219,000, down by 12,000 from the previous week's revised level of 231,000. Economists had anticipated that jobless claims would remain unchanged from the 230,000 initially reported for the previous week. This unexpected decline marks the lowest level of claims since the week ended May 18th, when they hit 216,000.
Additionally, a report from the Federal Reserve Bank of Philadelphia showed that manufacturing activity in the Philadelphia area returned to positive territory in September.
The National Association of Realtors is set to release its report on existing home sales for August shortly after trading commences. Existing home sales are expected to decrease to an annual rate of 3.90 million in August, following a rise to 3.95 million in July.
The Conference Board will also release its report on leading economic indicators for August, with expectations that the leading economic index will decline by 0.3 percent after a 0.6 percent drop in July.
Wednesday's trading session saw significant volatility following the Fed's announcement of an interest rate cut. The major averages experienced wild fluctuations before closing in negative territory. The Dow Jones Industrial Average and S&P 500 hit new intraday highs post-announcement but ultimately ended the day lower. The Dow dropped 103.08 points (0.3 percent) to 41,503.10, the S&P 500 fell 16.32 points (0.3 percent) to 5,618.26, and the Nasdaq slipped 54.76 points (0.3 percent) to 17,573.30.
Overseas, stock markets across the Asia-Pacific region mostly saw gains on Thursday. Japan's Nikkei 225 Index rose by 2.1 percent, while China's Shanghai Composite Index increased by 0.7 percent.
European markets have also shown strong gains. The French CAC 40 Index has jumped by 2.0 percent, the German DAX Index has climbed by 1.7 percent, and the U.K.'s FTSE 100 Index is up by 1.0 percent.
In commodities trading, crude oil futures have risen by $0.70 to $71.61 a barrel, after dipping by $0.28 to $70.91 a barrel on Wednesday. Gold futures, after increasing by $6.20 to $2,598.60 an ounce in the previous session, are currently up by $11.90 to $2,610.50 an ounce.
On the currency front, the U.S. dollar is trading at 143.45 yen, compared to 142.29 yen at Wednesday's close in New York. Against the euro, the dollar is valued at $1.1130, slightly up from yesterday's $1.1119.
