Dow Jones, S&P 500, Nasdaq set to open mostly higher after Fed announcement, Meta results

6.30am: Apple, Amazon and Alphabet report today

Wall Street is expected to open mixed but mostly higher after the US Federal Reserve turned less hawkish on interest rates and as Facebook and Instagram owner Meta delivered quarterly revenue that beat expectations and announced measures aimed at boosting shareholder value. 

While futures for the Dow Jones Industrial Average (DJIA) declined 0.1% in Thursday pre-market trading, those for the broader S&P 500 index rose 0.5%, and contracts for the Nasdaq-100 jumped 1.4%.

US stocks rallied towards the close on Wednesday after the Fed hiked rates by 25 basis points as expected and chair Jerome Powell told a press conference that “the disinflation process has started” and that it is “certainly possible” the Fed funds rate will remain below the 5% mark.

The DJIA ended 7 points higher at 34,093, reversing a 300-point loss earlier in the session, while the Nasdaq jumped 2% to 11,816 and the S&P 500 rose 1.1% to 4,119. The Russell 2000, which tracks small-cap stocks, gained 1.8% to 1,967.

“While Powell was determined not to overplay the shift in the Fed’s views on inflation and interest rates, certain comments were well received by the markets,” commented Craig Erlam, senior market analyst at OANDA.

“All things considered, I think there was enough there to conclude we’re almost at an end on tightening and market expectations of one more 25 basis point hike and maybe a couple of cuts later in the year look reasonable,” he added. “Of course, there’s plenty of data to come before the next meeting in March so a lot could change in that time.”

While earnings season has been tough so far this quarter, Erlam noted that Meta managed to put a smile on investors’ faces, announcing slightly better revenues than expected, a plan to reduce costs and make the company more efficient this year, and a $40 billion share buyback.

“That has seen the share price rise almost 20% in premarkets, and Nasdaq futures to rise more than 1%,” he said. “The question now is can Apple, Amazon, Alphabet and others deliver similar results today.”