US equity futures rallied in tandem after the latest FOMC minutes of the September meeting confirmed investors biases and outlooks for more rate reductions this year. Tech heavy Nasdaq finished the session 1% higher, the S&P500 clocked in a 0.7% gain, whereas the Dow Jones rose at softer 0.3% pace. Despite the government shutdown and the lack of economic news releases participants indulged in some risk-taking activity and rode the AI wave, seeking quick gains.
More specifically, officials noted that altering their restrictive stance and pivoting to looser financial conditions by lowering rates was the most appropriate course of action for alleviating pressure off a fragile labour market and safeguard at the same time the US economic growth trajectory.
Besides the downside risks to employment, policymakers underscored that the stickiness of price pressures and flagged the risk of inflation reigniting, citing tariff impact of President Trump’s policies, but at the end of the day this did not materially change their views for more cuts in 2025.
Almost half of policymakers anticipated two additional interest rate cuts by the end of 2025 and money markets have already moved drastically to almost fully price in a 25-basis-point rate cut later this month, while the probability of a similar move in December stands at around 75%.
Technical Analysis
NASDAQ Chart – Tech heavy Nasdaq scales now highs on robust demand for hyped up AI plans
Resistance: 25500 (R1), 26000 (R2), 26500 (R3)
Support: 24750 (S1), 23950 (S2), 23100 (S3)