US equity futures were tracking higher before the opening bell Thursday as traders assess the Federal Reserve's first rate hike since 2023 and the policy path ahead amid elevated inflation.
The S&P 500 rose 0.8%, the Dow Jones Industrial Average increased 0.7% and the Nasdaq added 1.1% in premarket activity. The three main indexes finished Wednesday trading lower for a third consecutive session.
On Wednesday, the Fed raised its benchmark lending rate by 25 basis points in a unanimous vote to combat sticky inflation, while signaling another hike later this year.
"The plain fact is that inflation is too high and has been for too long," Fed Chair Kevin Warsh said in a press conference yesterday. "This summer's inflation readings do not tell me that underlying trends have meaningfully improved."
In a social media post Wednesday, President Donald Trump said interest rates in the US "should be 1%, or less."
"Our growth, inflation and jobs forecasts suggest little need for further rate hikes, and it may well be that the Fed is striking a hawkish line in order to build more credibility with bond markets as they look to support Treasury efforts to anchor the long end of the curve," ING Bank said in a Wednesday report.
Markets are pricing in a 55% probability that the central bank will increase interest rates by 25 basis points in October, with the remaining odds in favor of a pause, according to the CME FedWatch tool.
Treasury yields were down Thursday, with the two-year rate retreating 1.2 basis points to 4.72% and the 10-year rate off 3.1 basis points to 4.97%.
On Wednesday, government data showed that retail sales rebounded more than expected in August as higher fuel prices lifted spending at gasoline stations and outlays on motor vehicles turned positive. Homebuilder confidence this month hit its lowest level since September 2025 amid elevated mortgage rates and material costs, the National Association of Home Builders and Wells Fargo said.
Thursday's economic calendar has the housing starts and permits report for August, the weekly jobless claims bulletin and the Philadelphia Fed manufacturing index for September, all at 8:30 am ET. The pending home sales index for last month is out at 10 am.
West Texas Intermediate crude oil was down 1.4% at $100.95 a barrel, while Brent decreased 1.9% to $103.90.
Saudi Arabia is reportedly making additional crude cargoes available to Asian refiners through ship-to-ship transfers off Oman's Sohar port, Reuters said, citing sources.
Saudi Arabia is working to return about half the capacity of its East-West oil pipeline within days, Bloomberg News reported. Drone attacks led to the shutdown of that pipeline last week.
Earlier in the week, US Energy Secretary Chris Wright told CNBC that the East-West pipeline outage was a "brief and temporary interruption" and will be restored soon.
Lennar's (LEN) class A stock was down 2.4% pre-bell after the homebuilder overnight reported weaker-than-expected fiscal third-quarter results as affordability challenges slowed home-buying activity. Nebius' (NBIS) US-listed stock was up 9.3%.
Gold was down 0.8% at $4,353 per troy ounce, while bitcoin inclined 0.7% to $76,331.
