July 21, 2024

US futures bounce back from worst day in months

US stock futures climbed on Thursday, headed for a rebound from their worst daily sell-off in three months as nerves settled and the prospect of interest-rate cuts buoyed spirits again.

S&P 500 (^GSPC) futures popped roughly 0.5%, pointing to a comeback from the benchmark index’s biggest single-day loss since October. Futures on the Dow Jones Industrial Average (^DJI) rose 0.4%, while those on the tech-heavy Nasdaq 100 (^NDX) gained 0.6% after both indexes snapped nine-day win streaks.

Warnings have come that stocks are ripe for a pullback after a record-breaking rally driven by expectations the Federal Reserve will pivot to cutting rates, potentially as soon as March. The market has stubbornly stuck to that conviction despite pushback from central bank officials, keeping stock prices aloft — until the rally’s breather on Wednesday.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

But there was no clear culprit for Wednesday’s sharp slide, and a range were put forward: Worries about the US economy after bellwether FedEx’s (FDX) downbeat revenue forecast, year-end profit-taking, and zero-day options trading among them.

On deck is an update on third-quarter GDP, which could give a window into whether the Fed is successfully managing a “soft landing” for the US economy. A reading on weekly jobless claims is also due.

In individual stocks, Micron Technology (MU) shares rose 6% in premarket trading after the memory chipmaker’s second-quarter revenue forecast topped Wall Street’s expectations. The outlook signals a 2024 revival for the memory chip sector, which has suffered a significant slump in prices.

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