US stocks rise ahead of Powell’s second appearance; Victoria’s Secret slumps

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Investing.com– U.S. stock index futures drifted higher Thursday, continuing the previous session’s positive tone as investors digested comments from Federal Reserve Chair Jerome Powell over the scope and scale of potential interest rate cuts.

By 06:50 ET (11:50 GMT), the Dow Jones Futures contract was up 58 points, or 0.2%, S&P 500 Futures traded 13 points, or 0.3%, higher and Nasdaq 100 Futures climbed 77 points, or 0.4%.

The main U.S. averages closed higher Wednesday, their first winning day in three, after Powell told a House committee that he expects the Fed will eventually slash interest rate down from more than two-decade highs this year.

Kashkari sees maybe one, two rate cuts in 2024

Fed Chair Jerome Powell is set to continue his two-day testimony before Congress later Thursday, this time appearing in front of the Senate.

His comments Wednesday did fuel optimism that the Fed will eventually cut rates this year, but he also flagged that policymakers wanted to see further evidence that inflation was sustainably easing toward the central bank’s stated 2% target before rolling out any cuts.

This notion was furthered by separate comments from Minneapolis Fed President Neel Kashkari, who said that he did not expect the Fed to cut rates more than twice this year.

He cited recent resilience in the U.S. economy, which could underpin U.S. inflation expectations and afford the Fed more headroom to keep rates higher. 

Kashkari’s comments echo those made by other Fed members over the past two weeks, who said that sticky inflation may undermine expectations of early rate cuts.

There is more employment data to digest Thursday in the form of weekly initial jobless claims, after U.S. job openings fell 26,000 in January, with hiring declining as labor market conditions continue to gradually ease.

This comes ahead of the crucial nonfarm payrolls release, due Friday, which will offer more cues of the strength of the U.S. economy. 

Costco, OneSpan earnings due

Corporate earnings include quarterly results from Costco (NASDAQ:COST) and Kroger (NYSE:KR) on Thursday.

Elsewhere, lingerie retailer Victoria’s Secret (NYSE:VSCO) slid almost 30% in premarket trade on weaker-than-expected guidance for 2024. 

On the other hand, cybersecurity firm OneSpan (NASDAQ:OSPN) surged 30% on consensus-beating quarterly earnings. 

New York Community Bancorp (NYSE:NYCB) extended a recovery, rising 4% after the struggling regional raised over $1 billion in new capital. 

Crude hands back previous session’s gains

Oil prices retreated Thursday, handing back the recent gains after upbeat Chinese trade data and a small-than-expected rise in U.S. crude inventories.

By 06:50 ET, the U.S. crude futures traded 0.9% lower to $78.44 a barrel, while the Brent contract dropped 0.9% to $82.21 a barrel. 

Data released earlier Thursday showed that China’s trade surplus grew more than expected in the first two months of 2024, providing hope that global trade is turning a corner.

Both benchmarks gained around 1% on Wednesday after U.S. crude inventories rose for a sixth week in a row, building by 1.4 million barrels, below the 2.1 million-barrel rise predicted.

Additionally, gold futures rose 0.2% to $2,162.05/oz, rallying to a new record high, while EUR/USD edged lower at 1.0893.

(Ambar Warrick contributed to this article.)