The US stock futures extended its rally on October 26, as major indexes climbed on renewed investor optimism amid expectations of Federal Reserve interest rate cuts and easing US-China trade tensions.
Stock futures showed positive movement, signaling continued investor optimism at the start of the trading week on October 27. Futures tied to the Dow Jones Industrial Average increased by approximately 290 points or 0.6%, while S&P 500 futures gained around 0.7%, and Nasdaq 100 futures rose nearly 0.9%.
Technology stocks led gains with key players like Microsoft and Alphabet, Meta ready to release their third-quarter results this week, drawing particular interest from investors.
The Federal Reserve, having made its first rate cut since December 2024 in September by lowering the federal funds rate by 25 basis points to a range of 4.00% to 4.25%, is expected to make further reductions.
Markets widely anticipate a second 25 basis point cut in the upcoming October 29 Federal Open Market Committee meeting, aiming to address a slowing jobs market despite persistent inflation above the Fed’s 2% goal. Inflation had risen modestly to 3.0% in September, up from 2.9% in August.
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The US-China trade situation has shown signs of de-escalation, which has buoyed risk appetite across global markets, with Asian equities surging in early trading. This calming of trade tensions alongside the Federal Reserve’s anticipated rate cuts has been cited by analysts as critical factors underpinning the positive sentiment.Stocks are coming off a bullish week, with all three major indices hitting record highs last Friday. The Dow Jones Industrial Average added roughly 1%, or 472.51 points. The S&P 500 ticked up 0.79%, while the Nasdaq Composite rose 1.15%.Overall, market watchers remain cautiously optimistic as favorable inflation readings combined with strong earnings growth appear to sustain the current bullish momentum.
The Federal Reserve’s policies in the coming weeks will continue to be a focal point for Wall Street as investors weigh the balance between economic growth and inflation control.
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