Wall St set for higher open after Fed hints at rate cuts By Reuters

By Shristi Achar A and imfcapital foreign exchange platformJohann M Cherian

(Reuters) -Wall Street's main indexes were on course to open higher on Thursday, a day after the Federal Reserve hinted an end to its recent aggressive rate hikes and signaled that borrowing costs would be lower next year.

The Fed left interest rates unchanged on Wednesday, as expected, with Chair Jerome Powell saying the historic tightening of monetary policy was likely over, as inflation falls faster than expected, and discussions on cuts in borrowing costs were coming "into view".

The Fed has raised its policy rate by a market-punishing 525 basis points since March 2022 in an effort to curb decades-high inflation. On Wednesday, 17 of 19 Fed officials projected the policy rate would be lower by end-2024.

The dovish pivot in the central bank's statement triggered a rally in equities on Wednesday and sent the Index to a record closing high.

"Investors are feeling pretty bullish in terms of having three rate cuts penciled in for next year, which is a little bit more than the bears were expecting," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Money markets now see an 83.3% chance of at least a 25-basis-point rate cut in March 2024, up from about 50% before the policy decision, while almost fully pricing in another cut in May, according to CME Group's (NASDAQ:) FedWatch tool.

Treasury yields also fell to multi-month lows after Wednesday's events, with the yield on the benchmark 10-year Treasury note last standing at 3.9656%. [US/]

Investors also parsed retail sales data for November, which rose 0.3% on a monthly basis compared with estimates of a 0.1% fall, according to economists polled by Reuters.

Another report showed weekly jobless claims stood at 202,000 for the week ended Dec. 9, lower than the estimated 220,000.

"A lot of the hopes of a soft landing are pinned on the consumer staying strong, and the economy staying out of recession. As long as you see a strong consumer, that's good news for the soft landing camp," Zaccarelli said.

At 8:43 a.m. ET, were up 143 points, or 0.39%, were up 20 points, or 0.42%, and were up 62 points, or 0.37%.

Among individual movers, Adobe (NASDAQ:) shed 3.9% after the Photoshop maker forecast annual and quarterly revenue below estimates.

(NASDAQ:) advanced 11.0% after an experimental messenger RNA cancer vaccine it co-developed with Merck cut the chance of recurrence or death from melanoma by half after three years, when paired with Merck's Keytruda drug.

Occidental Petroleum (NYSE:) added 2.4% after Warren Buffett's Berkshire Hathaway (NYSE:) acquired nearly 10.5 million shares of the oil giant for about $588.7 million.

(NYSE:) rose 4.0% after Piper Sandler upgraded the sportswear retailer to "overweight" from "neutral".

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