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Federal Reserve Chair Jerome Powell said on Wednesday it was
time to slow down coming interest rate hikes, while also
signaling a protracted economic adjustment amid high borrowing
costs.
The S&P 500 index closed above its 200-day moving average for
the first time since April in the previous session, while the
Nasdaq index ended over 4% higher.
"Seeing a little bit of profit taking," said Rick Meckler,
partner at Cherry Lane Investments in New Vernon, New Jersey. "I
wouldn't be surprised at all to see market continue its rally."
Powell, however, cautioned that the fight against inflation was
far from over and indicated that the terminal rate will be
"somewhat higher" than the 4.6% indicated by policymakers in
their September projections.
Traders are now seeing a 91% chance that the Fed will increase
its key benchmark rate by 50 basis points in December, with the
terminal rate expected to peak under 5% in May 2023. [FEDWATCH]
Due later in the day, the Commerce Department's personal
consumption expenditure (PCE) index, the Fed's preferred
inflation metric, likely rose 0.8% in October from 0.6% in the
previous month.
The core PCE, excluding volatile items, is seen easing to 0.3%
from 0.5% in September.
Investors also await nonfarm payrolls data on Friday, with the
ADP report on Wednesday suggesting cooling demand for labor.
At 7:19 a.m. ET, Dow e-minis were down 56 points, or 0.16%, S&P
500 e-minis were down 2 points, or 0.05%, and Nasdaq 100 e-minis
were down 13.25 points, or 0.11%.
Salesforce Inc lost 7.3% in premarket trading on Thursday after
the software maker said Bret Taylor would step down as co-chief
executive officer in January and that co-founder Marc Benioff
will become the sole CEO.
Most megacap technology and growth stocks like Alphabet Inc,
Apple Inc, Microsoft Corp, Tesla Inc and Meta Platforms Inc were
down between and 0.1% and 0.2%.
Costco Wholesale Corp fell 2.8% after the membership-only retail
chain reported slower sales growth in November.
(Reporting by Shubham Batra and Ankika Biswas in Bengaluru;
Editing by Shounak Dasgupta)
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