US stock futures were lower early Thursday as traders digested the Federal Reserve's pledge to keep rates low for the next several years.
Dow Jones Industrial Average, which used to trade just below the flatline, pointed to an opening loss of more than 250 points. S&P 500 and Nasdaq 100 futures also traded in negative territory.
Members of the Federal Open Market Committee said the US overnight rate could stay anchored at zero through 2023 as the central bank tries to stimulate inflation. In a statement, the committee said, "With inflation consistently below this longer-term target, the committee will seek to keep inflation moderately above 2% for some time so that inflation averages 2% over time."
Fed chairman Jerome Powell reiterated this stance in a press conference, saying that simple monetary policy will "last until these results, including maximum employment, are achieved".
He also said that parts of the US economy will continue to struggle unless lawmakers give further fiscal stimulus. That comment from Powell came when lawmakers struggled to reach agreement on a new law to help coronavirus. Earlier Wednesday, White House Chief of Staff Mark Meadows said he was optimistic that an agreement could be reached.
Usually the prospect of lower interest rates over the longer term spurs buying stocks, but that wasn't the case on Wednesday.
The S&P 500 and Nasdaq both closed lower and the Dow finished its session highs well. Big Tech dragged the S&P 500 and Nasdaq down, with Apple, Facebook and Microsoft all closing lower.
"The major indices fell back to their short-term trading range following the Fed announcements, confirming that the bulls are still not out of the woods," said Ken Berman, founder of Gorilla Trades. "While there was nothing scary in today's Fed announcements, stocks reacted bearishly, especially in the tech sector."
On Thursday, Wall Street will get the latest update of weekly jobless claims in the US at 8:30 am CET. At this time, the dates for the start of US housing construction will also be set for release.
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