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Stock futures inch up as traders weigh another large rate hike from Federal Reserve – CNBC

Brendan McDermid | Reuters

U.S. stock futures inched higher on Thursday morning following a volatile session in the major averages as traders weighed another large rate hike from the Federal Reserve.

Dow Jones Industrial Average futures ticked up 100 points, or 0.34%. S&P 500 and Nasdaq 100 futures rose 0.28% and 0.19%, respectively.

During the regular session on Wednesday, the Dow Jones Industrial Average slid 522 points, or 1.70%, despite jumping more than 300 points earlier in the day. The S&P 500 shed 1.71%, and the Nasdaq Composite slumped 1.79%.

The Federal Reserve passed through a third consecutive 0.75 percentage point increase. Policymakers pledged to continue raising rates as high as 4.6% in 2023 before pulling back in the fight against inflation, spurring fears on Wall Street that the economy could tip into a recession.

The central bank expects to raise its year-end rate to 4.4% in 2022, continuing aggressive action against rising prices through the remainder of the year. 

“I think they should slow down,” DoubleLine Capital CEO Jeffrey Gundlach said Wednesday on CNBC’s “Closing Bell: Overtime.” “Monetary policy has lags that are long and variable, but we’ve been tightening now for a while,” he added, noting that the impact of the tightening could lead to a recession.

On the economic front, the latest data on weekly jobless claims is expected Thursday at 8:30 a.m. ET.

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Morgan Stanley’s Mike Wilson is staying defensive amid the persistent market volatility this year. He names the key attribute he’s looking for in stocks.

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CFRA’s Sam Stovall expects a retest of June lows

Investors should expect that markets will retest June lows now that they’ve breached the 3,800 level, according to CFRA’s Sam Stovall.

The chief investment strategist pointed to the latest action from the Federal Reserve, which indicated it will continue an aggressive rate hiking campaign to reach 4.4% by the end of this year.

“The markets are dancing to the Fed Funds Waltz, with the bond market leading the stock market. Since the FOMC has signaled a ‘higher for longer’ interest rate policy, the pace of the dance has picked up, increasing the risk that both may spin out of control,” Stovall wrote in a Wednesday note.

“With the 3,800 level on the S&P 500 having been breached, we now expect a retest of the June 16 closing low of 3666.77,” he added.

— Sarah Min

KB Home shares decline following quarterly report

Shares of KB Home fell 1.2% in extended trading after the homebuilder said in its quarterly report that it expects more challenges ahead.

“Although we experienced a shortfall in deliveries relative to our expectation due to extended build times and ongoing supply chain constraints, which will also impact our 2022 fourth quarter, our results demonstrate our larger scale, excellent portfolio of communities and a healthy balance sheet,” CEO Jeffrey Mezger said in a statement.

KB Home reported earnings of $2.86 per share on revenue of $1.85 billion. Analysts surveyed by Refinitiv were expecting earnings of $2.67 per share on revenue of $1.87 billion.

— Sarah Min

Stock futures open lower

U.S. stock futures fell on Wednesday night following a volatile session in the major averages as traders weighed another large rate hike from the Federal Reserve.

Dow Jones Industrial Average futures declined by 16 points, or 0.05%. S&P 500 and Nasdaq 100 futures dipped 0.19% and 0.31%, respectively.

— Sarah Min

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