Investing.com – U.S. futures pointed to a lower open on Thursday as markets continued to take stock of the Federal Reserve’s (Fed) dovish stance on monetary policy and waited for a slew of economic data to be released later in the day.
The blue-chip Dow futures fell 67 points, or 0.39%, by 11:03AM GMT, or 7:03AM ET, the S&P 500 futures lost 8 points, or 0.40%, while the tech-heavy Nasdaq 100 futures traded down 20 points, or 0.46%.
The Fed not only kept interest rates unchanged as expected but scaled back predictions for rate hikes this year to just two compared to the previous forecast of four citing that "global economic and financial developments continue to pose risks”.
The decision came as Fed members also lowered growth and inflation forecasts and Fed chair Janet Yellen indicated she was not convinced that the recent uptick in prices was a return to an uptrend, insisting that “caution is appropriate” when considering interest rate hikes.
Accompanying the dovish stance, it may be worth noting that the decision was not unanimous as Kansas Fed president Esther George preferred to raise rates in 25 basis points to a range of between 0.5% and 0.75%.
The market appeared to consider that the first rate hike could still come in June, though Morgan Stanley (NYSE:MS) pointed out that the probability had shrunk to “well below 50%” compared to the more than 50% chance before the meeting and traders of interest-rate futures now seeing no rate rise before September.
The dollar reacted to the news dropping to 5-months lows and continued its descent on Thursday. The U.S. dollar index which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.87% at 94.87 at 11:05AM GMT, or 7:05AM ET, while EUR/USD rallied 0.88% to 1.1324 ,GBP/USD rose 0.59% to 1.4343 and USD/JPY lost 1.13% to 111.28.
Later in Thursday’s session, market players will get a fresh reading on the strength of the U.S. economy as a handful of secondary data reports are the major events on the calendar.
The data releases due Thursday include Fed Chair Janet Yellen's preferred indicator on the labor market, the Job Openings and Labor Turnover Survey for January.
Other U.S. economic reports due Thursday include weekly jobless claims, the Philadelphia Fed survey for March, February leading indicators and fourth-quarter current account data.
Oil prices continued to climb to 3-month highs after bullish weekly supply data, an agreement by global oil producers to meet next month to discuss an output freeze and a broadly weaker U.S. dollar as a result of a surprisingly dovish Fed all contributed to strong gains.
U.S. crude futures rose 1.69% to $39.11by 11:06AM GMT or 7:06AM ET, while Brent oil traded up 1.46% to $40.92.
In a relatively light business calendar, FedEx (NYSE:FDX) rose around 5% in the after after the worldwide package delivery company, considered a bellwether for the global economy, beat earnings estimates by $0.17 in its fiscal third quarter reported Wednesday after the close..
Amid a slew of lesser quarterly reports, Adobe Systems Incorporated (NASDAQ:ADBE), Lennar (NYSE:LEN), Lands` End Inc (NASDAQ:LE) or Marvell Technology Group Ltd (NASDAQ:MRVL) will also report earnings on Thursday.