U.S. equity futures moved firmly higher in early Thursday trading, while the dollar extended its recent gains, as markets reacted to an impending tariff deal between Washington and London following a dour assessment of the trade war impact from the Federal Reserve.
Stocks ended higher on Wednesday, with the S&P 500 rising around 0.43% by the close of trading, as reports of nascent trade talks between the U.S. and China offset the hawkish tone on rates from Fed Chairman Jerome Powell.
The central bank left its key lending rate unchanged at 4.375% for the third consecutive meeting this year as Powell hinted to potential stagflation risks in the world’s biggest economy as a result of the ongoing trade uncertainty.
“We think right now the appropriate thing to do is to wait and see how things evolve,” Powell told reporters in Washington. “There’s so much uncertainty.”
ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
Some of that could be put to rest today, with President Donald Trump set to unveil a narrow tariff agreement with the United Kingdom at 10:00 am Eastern time. The deal, however, will fall far short of a comprehensive package on $420 billion in trade the two nations transact each year.
Tech stocks are also set to get a boost from the Trump administration’s decision to scrap Biden-era rules, set to come into effect next week, that would ban or limit the export of high-end AI technologies.
Related: Fed hints at stagflation risks, holds rates steady amid tariff impact
“The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation,” a Commerce spokeswoman told reporters. “We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance.”
Wall Street futures suggest solid opening bell gains across the board Thursday, with the S&P 500 called 60 points higher and the Dow Jones Industrial Average priced for a 355 point advance.
The tech-focused Nasdaq, meanwhile, is called 295 points higher with Nvidia (NVDA) , Intel (INTC) and Google parent Alphabet (GOOGL) pacing the premarket gains.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, jumped 0.47% to 100.087 while benchmark 10-year Treasury note yields were holding steady at 4.316%.
In overseas markets, Britain’s FTSE 100 rose 0.34% in London amid news of the tariff pact, with investor also eying today’s Bank of England rate decision later in the session.
More Economic Analysis:
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The region-wide Stoxx 600, meanwhile, umped 0.57% in mid-day trading in Frankfurt.
Overnight in Asia, Japan’s Nikkei 225 ended 0.48% higher on the session, following on from last night’s gains on Wall Street, while the regional MSCI-ex Japan benchmark rose 0.58% into the close of trading.
