Stock Market Today: U.S. Stock Futures Hold Steady After Trump Win and Fed Rate Cut

Stock Market News: U.S. stock futures showed little movement on Friday morning, as markets digested a strong week of gains led by a post-election rally following President-elect Donald Trump’s victory and the Federal Reserve’s decision to cut interest rates.

Futures for the S&P 500 dipped slightly by less than 0.1%, while Nasdaq 100 futures fell 0.2%. However, Dow Jones Industrial Average futures inched higher, signaling a steady start for the day. Despite these small changes in futures, all three major indexes are on track to end the week with strong gains, supported by Wednesday’s massive rally after the election results.

S&P 500 and Nasdaq Post Strong Weekly Gains

The S&P 500 has climbed about 4.3% this week, and the Dow has gained nearly 4%. This marks the best week for both indexes since November 2023. Nasdaq, led by technology stocks, has outperformed even those strong gains, rising 5.6% through Thursday’s close. On Thursday, the S&P 500 reached a new record, rising 0.7%, while the Nasdaq jumped 1.5% and closed above 19,000 for the first time in history. Despite a slight dip for the Dow, all three major averages hit intraday highs during the session.

Federal Reserve Cuts Interest Rates Amid Economic Growth

In a closely watched move, the Federal Reserve announced a quarter-point interest rate cut on Wednesday, in line with market expectations. Fed Chair Jerome Powell expressed confidence in the U.S. economy during a press conference, noting that the central bank is closely monitoring inflation and employment levels.

However, Scott Helfstein, Head of Investment Strategy at Global X ETFs, cautioned that while the economy looks stable, the path of future Fed cuts remains uncertain. “The risks around inflation are more present today than a week ago, with the potential for faster growth due to new tariffs,” Helfstein said.

Market Outlook: Trump Win and Deregulation Expectations

The market generally sees a Republican-controlled government as favorable for business, with expectations of deregulation, tax cuts, and a potential boost to mergers and acquisitions. However, concerns about an increased federal deficit and the possibility of new tariffs have raised concerns about inflation.

“The combination of faster growth and new tariffs could be inflationary,” Helfstein added. “While the Fed’s current outlook is balanced, this could quickly change if inflationary pressures reaccelerate.”

Takeaways

Stock Futures: U.S. stock futures were mostly flat on Friday morning after a record-setting week, with the S&P 500 up 4.3% and Nasdaq advancing 5.6%.

Federal Reserve: The Fed’s interest rate cut was in line with market expectations, but the future of further cuts remains uncertain due to inflation concerns.

Market Expectations: Investors view a Trump administration as positive for growth and deregulation, though inflation risks could pose a challenge.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.