U.S. stock futures point mostly higher after Fed slows pace of rate hikes

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By Scott Kanowsky 

Investing.com -- U.S. stock futures mostly gained on Thursday following a move by the Federal Reserve to slow the pace of its recently aggressive interest rate hikes and gave its outlook for the future path of inflation.

At 06:30 ET (11:30 GMT), S&P 500 futures traded 21 points or 0.51% higher, and tech-heavy Nasdaq 100 futures gained 169 points or 1.37%. The Dow futures contract edged down by 36 points or 0.11%.

Major U.S. indexes rallied on Wednesday to cancel out earlier losses after the Fed increased borrowing costs by 25 basis points, pumping the brakes slightly on policy tightening following a string of unprecedently large hikes last year. Markets were buoyed as well by comments from Fed chair Jerome Powell, who said that he believes the "disinflationary process has started" in the world's largest economy.

This helped fuel investor hopes that the U.S. central bank may eventually lower rates before the end of 2023, although the optimism was tempered by Powell's warning that "ongoing" increases would be needed to quell inflation.

Attention in markets is also turning to the latest policy decisions today from the European Central Bank and the Bank of England, with both widely expected to hike borrowing costs by 50 basis points as they attempt to corral elevated prices.

ECB president Christine Lagarde said in January that the central bank will "stay the course" on the its own monetary policy tightening cycle, adding that price growth is still "way to high" despite recent data suggesting that it may have peaked.

The BoE also faces stubbornly high prices, with inflation running hotter than in the U.S. or Europe. But further interest rates hikes could weigh on an economy already tipped by the IMF to be the only one in the G7 to contract in 2023.

In the corporate world, Meta Platforms (NASDAQ:META) promised to rein in costs this year and unveiled a new $40 billion share buyback, sending the stock higher in after-market trading and giving a lift to its tech peers. This week's parade of earnings is set to continue later on Thursday with results from Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).

Meanwhile, Shell PLC (LON:SHEL) has reported better-than-expected fourth quarter income, driving 2022 profit up to a fresh record high, as the British oil and gas major was boosted by a surge in energy prices sparked by the war in Ukraine. Shares in the group rose.

But Deutsche Bank AG NA O.N. (ETR:DBKGn) shares dipped after the German lender reported lower-than-expected net revenue and pre-tax profit in the fourth quarter.

Elsewhere, U.S. crude futures were 0.12% higher $76.53 a barrel by 06:30 ET, while the Brent contract was down 0.08% to $82.77 per barrel.

Additionally, gold futures increased by 1.44% to $1,970.75/oz, while the EUR/USD gained 0.06% to 1.0996.