Stock

Market snapshot: time for the Santa Claus rally? US inventory market futures lengthen the swing larger after the Fed

US stock futures indicated further gains on Thursday, prolonging the surge seen following the Federal Reserve's rate decisions.

What's happening

Futures on the Dow Jones Industrial Average
YM00,
+ 0.51%
rose 170 points, or 0.5%, to 35986

Futures on the S&P 500
ES00,
+ 0.57%
0.6% or 26 points to 4726. added

Futures on the Nasdaq 100
NQ00,
+0.65%
gained 0.6% or 104 points on 16391

On Wednesday the Dow Jones Industrial Average
DJIA,
+ 1.08%
rose 383 points, or 1.08%, to 35927, the S&P 500
SPX,
+1.63%
up 76 points, or 1.63%, to 4710, and the Nasdaq Composite
COMP,
+ 2.15%
gained 328 points or 2.15% to 15566.

What is driving the markets?

Analysts said the Fed was more restrictive in its forecasts for rate hikes in 2022 and 2023 as it increased the pace of expanding bond purchases.

"Based on asset price movements during and after the session, the fear of the FOMC meeting was probably even more exaggerated than we thought," said Steve Englander, director of G10 global currency research and North America macro strategy, Standard Chartered.

"The initial market reaction does not always last, but we suspect that both the Fed and investors believe that the Fed is aware of and is responding to inflation risks using a measured, data-driven approach," said Englander.

Mike Kramer of Mott Capital Management attributed the increase to the decrease in volatility. “The stock rally was driven entirely by the downward movement of the VIX
VIX,
-3.01%,
when the implied volatility decreases. We see that a lot today, ”he said.

Further decisions by the central bank are due on Thursday, including those of the Bank of England and the European Central Bank. There is also a range of US economic data, including jobless claims and construction starts.

Lennar
LEN,
+1.75%
A profit spike was reported late Wednesday that fell short of analysts' expectations on news that could jeopardize a recent homebuilding rally.

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