Stock futures moved into the red zone as investors digested the half-a-point increase in benchmark interest rate by the Federal Reserve on Wednesday.
Futures on the Dow Jones Industrial Average (DJIA) was down 0.30%, as of 4.24 a.m. EST, on Thursday. Meanwhile, the S&P 500 (SPX) futures lost 0.48%, whereas the Nasdaq 100 (NDX) futures slipped 0.66%.
The southward movement came after a relief rally that led the Dow to end Wednesday’s regular trading session 2.81% higher. Meanwhile, the S&P 500 and the Nasdaq 100 gained 2.99% and 3.41%, respectively, at the end of the day.
Along with the second round of interest rate hike, the central bank also confirmed that it will begin to shrink its assets worth $9 trillion on its balance sheet from June.
Investors were relieved after Fed Chair Jerome Powell assured of a very low possibility of a 75-basis-point hike. The market was tensed that the increasingly aggressive tightening of monetary policy might lead to a recession.
Nonetheless, a higher-than-expected interest rate hike is not completely off the table, and the Fed will continue to monitor the inflation and take aggressive steps if needed.
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