Investing.com - Here are the top five things you need to know in financial markets on Thursday, January 31:
1. Fed Signals Patience
The Federal Reserve sent the clearest signal yet that its three-year drive to tighten monetary policy is close to an end in the face of rising pressure on the economy from slowing global growth.
The U.S. central bank left interest rates on hold at the conclusion of its policy meeting on Wednesday and pledged to be patient with further interest rate hikes, dropping its guidance that ‘further gradual’ rate rises will be needed.
It also said it could alter the pace of its balance sheet reduction "in light of economic and financial developments".
The Fed's announcement left market expectations for an interest-rate hike this year hanging by a thread, and raised the chances of a cut in 2020, according to Investing.com's Fed Rate Monitor Tool.
On the data front, Thursday's economic calendar includes weekly jobless claims figures and fourth-quarter employment cost numbers both due at 8:30AM ET (13:30 GMT).
Investors are likely to keep an eye out for Chicago PMI data at 9:45AM ET (14:45 GMT) and a report on new home sales at 10AM ET (15:00 GMT).
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 95.05 by 5:35AM ET (10:35 GMT), having hit an overnight low of 94.87, the weakest since Jan. 11.
In the bond market, U.S. Treasury prices rose, pushing yields lower across the curve, with the benchmark 10-year yield slipping to 2.66%.
Read more: Fed Pivots From Hawkish To Dovish; Signals Patience Is The New Watchword: Darrell Delamaide
2. Wall Street Set to Pause After Post-Fed Rally
U.S. stock futures pointed to a subdued open, as investors looked ahead to the latest round of corporate earnings.
The blue-chip Dow futures were down 30 points, or around 0.1%, the S&P 500 futures dipped 1 point, while the tech-heavy Nasdaq 100 futures indicated a gain of 14 points, or roughly 0.2%.
The moves in premarket come after Wall Street's major indexes surged on Wednesday in reaction to the Fed's policy decision.
Elsewhere, European stocks were mixed, with major bourses in the region moving in different directions amid some weak economic data. Brexit continues to take center stage as the European Union signalled it won't renegotiate the divorce deal with the U.K.
Earlier, markets in Asia closed mostly higher.
3. Amazon Highlights Another Busy Day of Earnings
Investors will be inundated with corporate earnings in what will be one the busiest days of the fourth-quarter reporting season.
Results from General Electric (NYSE:GE), United Parcel Service (NYSE:UPS), Mastercard (NYSE:MA), Blackstone (NYSE:BX), Blue Apron (NYSE:APRN), Celgene (NASDAQ:CELG), Hershey (NYSE:HSY), Sprint (NYSE:S), DowDuPont (NYSE:DWDP), Altria (NYSE:MO), Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC), ConocoPhillips (NYSE:COP), and Valero Energy (NYSE:VLO) are all due ahead of the opening bell.
But most of the focus will fall on Amazon (NASDAQ:AMZN), which reports earnings after the closing bell. According to estimates, Amazon’s earnings per share should total $5.64 on revenue of $71.87 billion.
Joining the e-commerce giant after the close will be Deckers (NYSE:DECK), and Symantec (NASDAQ:SYMC).
4. Facebook Surges After Earnings Smash Expectations
Facebook (NASDAQ:FB) shares looked set for a strong day after the world's largest online social media network reported better-than-expected earnings, beating on both the top and bottom lines.
Earnings per share were $2.38, higher than the expected $2.18, while revenue totaled $16.91 billion, which beat estimates of $16.4 billion
The results showed that that digital advertisers were still flocking to spend money on the service in order to reach customers even after a series of high-profile embarrassments for the world's largest online social media network.
Investors have worried that Facebook's pledge to invest heavily to improve its privacy and security standards would blunt the company's growth, but its fourth-quarter results appeared to soothe those concerns.
In pre-market trading, Facebook shares surged 11.4% to $167.58, up from Wednesday's close of $150.42.
Other big premarket movers included Tesla (NASDAQ:TSLA), which lost 5.2% after the company posted mixed earnings and announced the departure of its chief financial officer.
Another notable decliner was Microsoft (NASDAQ:MSFT), which lost 2% after the company issued mixed earnings and said cloud computing sales grew more slowly than a year earlier.
5. Trump to Meet with China Vice Premier Liu
U.S. President Donald Trump will meet Chinese Vice Premier Liu He in the Oval office to discuss trade at 3:30PM ET (20:30 GMT), in what will be the highest-level meeting since Trump and Chinese President Xi Jinping agreed a 90-day truce in their trade war in December.
The two countries opened a pivotal round of high-level talks on Wednesday aimed at resolving their ongoing trade dispute amid deep differences over Chinese practices on intellectual property and technology transfer.
The latest round of discussions come with about a month to reach a deal before a March 2 U.S. deadline to increase tariffs on $200 billion worth of Chinese goods.
-- Reuters contributed to this report