U.S. Stocks Poised To Extend Yesterday's Rally In Early Trading

(RTTNews) - Following the rally seen late in the previous session, stocks are likely to see further upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.

The markets may continue to benefit from a positive reaction to yesterday's monetary policy announcement by the Federal Reserve.

While the Fed left interest rates unchanged, as widely expected, the central bank also maintained its forecast for three interest rate cuts this year.

The unrevised rate cut forecast is seen as bullish for stocks, as some investors had been worried recent hotter-than-expected inflation data could lead Fed officials to reconsider lowering rates.

"We view today's FOMC interest rate decision and press conference as bullish for the equity markets and soft landing scenario," said Larry Tentarelli, President and Founder, Blue Chip Daily Trend Report.

"A concern that we had going into was the recent higher than forecast CPI readings," he added. "The FOMC dot plot (FOMC members projections for future interest rate levels) remained unchanged at 3 cuts expected for 2024, which we view as a major positive."

The futures remained positive following the release of a Labor Department report unexpectedly showing a slight drop by first-time claims for U.S. unemployment benefits in the week ended March 16th.

The Labor Department said initial jobless claims edged down to 210,000, a decrease of 2,000 from the previous week's revised level of 212,000.

The dip surprised economists, who had expected jobless claims to rise to 215,000 from the 209,000 originally reported for the previous week.

The Federal Reserve Bank of Philadelphia also released a report showing a modest slowdown in the pace of growth in regional manufacturing activity in the month of March.

The Philly Fed said its diffusion index for current general activity slipped to 3.2 in March from 5.2 in February, although a positive reading still indicates growth. Economists had expected the index to fall to a negative 2.3.

Not long after the start of trading, the National Association of Realtors is scheduled to release its report on existing home sales in the month of February. Existing home sales are expected to decrease to an annual rate of 3.94 million in February after surging to a rate of 4.00 million in January.

The Conference Board is also due to release its report on leading economic indicators in the month of February. The leading economic index is expected to fall by 0.3 percent in February after sliding by 0.4 percent in January.

Stocks showed a lack of direction throughout much of the trading session on Wednesday before rallying following the Federal Reserve's monetary policy announcement. The major averages all showed strong moves to the upside, reaching new record closing highs.

The major averages reached new highs for the session in the final hour of trading, ending the day sharply higher. The Dow jumped 401.37 points or 1.0 percent to 39,512.13, the Nasdaq surged 202.62 points or 1.3 percent to 16,369.41 and the S&P 500 advanced 46.11 points or 0.9 percent at 5,224.62.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index soared by 2.0 percent, while Hong Kong's Hang Seng Index shot up by 1.9 percent.

Most European stocks have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has surged by 1.5 percent and the German DAX Index is up by 0.4 percent, the French CAC 40 Index is nearly unchanged.

In commodities trading, crude oil futures are slipping $0.13 to $81.14 a barrel after slumping $1.46 to $81.27 a barrel on Wednesday. Meanwhile, after inching up $1.30 to $2,161 an ounce in the previous session, gold futures are soaring $45.90 to $2,206.90 an ounce.

On the currency front, the U.S. dollar is trading at 151.29 yen versus the 151.26 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0904 compared to yesterday's $1.0922.