U.S. stock futures advanced on Thursday following Wednesday’s mixed moves. Futures of major benchmark indices were higher.
A 25-basis-point rate cut was delivered by the Federal Reserve, with Fed Chair Jerome Powell signaling more easing could be coming, as a part of “risk management” with the shift partly driven by a cooling labor market and growing downside risks to employment.
Meanwhile, the 10-year Treasury bond yielded 4.05% and the two-year bond was at 3.52%. The CME Group’s FedWatch tool‘s projections show markets pricing an 89.8% likelihood of the Federal Reserve cutting the current interest rates in its October meeting.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Thursday. The SPY was up 0.84% at $664.72, while the QQQ advanced 0.98% to $595.80, according to Benzinga Pro data.
Cues From Last Session
Most sectors on the S&P 500 closed positively on Wednesday, with consumer staples, financial, and materials stocks posting the biggest gains. However, information technology and industrials bucked the market trend, closing lower. This contributed to a mixed settlement for U.S. stocks.
Among individual companies, General Mills Inc. GIS reported fiscal 2026 first-quarter results that came in slightly ahead of Wall Street expectations. In contrast, Manchester United PLC MANU shares fell more than 6% on Wednesday after the company reported mixed fourth-quarter financial results.
Economic reports showed U.S. housing starts dipping 8.5% month-over-month to an annual rate of 1.307 million units in August, missing market estimates of 1.37 million and following a revised 1.429 million in the previous month. Building permits also declined by 3.7% to an annualized rate of 1.312 million in August.
The Dow Jones index ended 260 points or 0.57% higher at 46,018.32, whereas the S&P 500 index fell 0.097% to 6,600.35. Nasdaq Composite declined 0.33% to 22,261.33, and the small-cap gauge, Russell 2000, gained 0.18% to end at 2,407.34.
Insights From Analysts
As the Federal Reserve enters the second year of its monetary easing, which began in September 2024, history suggests the S&P 500 could see substantial growth. On average, the index has returned over 16% in the second year of rate-cutting cycles. However, this optimistic outlook depends entirely on the U.S. economy avoiding a recession.
According to Jeff Buchbinder, Chief Equity Strategist at LPL Financial, “Year two of rate-cutting cycles has historically delivered solid gains for stocks — provided the economy avoids recession.”
The first year of this cycle, which started with a 0.5% cut on September 18, 2024, has already been strong. The S&P 500 posted a return of over 17% through September 18, 2025, easily beating the historical first-year average of 9.6%. The Fed continued easing policy on Wednesday with another quarter-point rate reduction.
Analysis of the last 50 years shows a clear trend of positive stock market performance when the Fed cuts rates. While year one returns averaged 9.6%, year two has historically performed even better, with an average gain of 16.4%.
“We would happily accept these returns over the next twelve months,” Buchbinder said, adding that current “lofty valuations” might moderate future gains.
Despite a positive outlook, Buchbinder warns that the macroeconomic situation is “far from assured.” Several potential risks could derail the S&P 500’s progress, including:
High government deficit spending is pushing long-term rates up.
A weakening job market that could trigger recession fears.
Ongoing legal battles over tariffs.
Geopolitical instability.
Ultimately, the consensus view is that “Markets like rate cuts that are a luxury, not an emergency.” This suggests the current environment is favorable for stocks, so long as the risk of a recession remains low.
Meanwhile, the Federal Reserve’s latest economic projections revealed a surprisingly shallow path for interest rate cuts in 2026, signaling that the policy will remain restrictive as the central bank contends with a resilient economy and sticky inflation. –
The committee’s median forecast for the federal funds rate shows a decline to only 3.4% by the end of 2026, a mere 0.2 percentage point drop from the 3.6% projected for year-end 2025.
While 20 bps is less than a standard cut of 25 bps, this indicates that the median FOMC participant does not foresee a clear case for even one full rate reduction over the course of 2026.
The conflicting signals and internal divisions left many observers struggling to find a coherent message.
Anna Wong, Chief U.S. Economist for Bloomberg, stated, “I have not seen a meeting with so much contradictions”. The wide dispersion of views suggests the Fed’s path for 2026 remains highly uncertain and will be subject to contentious debate.
See Also: How to Trade Futures
Upcoming Economic Data
Here’s what investors will be keeping an eye on Thursday;
Initial jobless claims data for the week ending Sept. 13 and September’s Philadelphia Fed manufacturing survey will be announced by 8:30 a.m. ET.
August’s U.S. leading economic indicators data will be out by 10:00 a.m. ET.
Stocks In Focus
Darden Restaurants Inc. DRI rose 1.03% in premarket on Thursday, ahead of its earnings report scheduled to be released before the opening bell. Analysts estimate earnings of $2.00 per share on the revenue of $3.04 billion.
FactSet Research Systems Inc. FDS was 1.15% higher as analysts expect it to report earnings of $4.13 per share on the revenue of $593.45 million before the opening bell.
FedEx Corp. FDX was up 0.12% ahead of its earnings report scheduled to be released after the closing bell. Analysts estimate earnings of $3.62 per share on revenue of $21.67 billion.
Bullish BLSH jumped 7.91% after posting a profit for the second quarter after Wednesday’s closing bell. Its quarterly earnings were 93 cents per share, versus a year-ago loss of $1.03 per share. It reported $58.63 million in revenue, which was up from $49.57 million during the same period last year.
89bio Inc. ETNB surged 85.15% as it agreed to be acquired by Roche for $14.50 per share in cash at closing, representing around a 79% premium to 89bio’s closing stock price on Sept. 17.
Cracker Barrel Old Country Store Inc. CBRL dropped 9.28% after a mixed fourth-quarter report and an anticipation of $25 million hit from Trump’s tariffs in fiscal year 2026.
Aquabounty Technologies Inc. AQB popped 61.40% after it was confirmed that it met NASDAQ’s minimum bid price requirement.
Krispy Kreme Inc. DNUT advanced 3.49% following Federal Bureau of Investigation Director Kash Patel‘s congressional testimony about his stock purchase.
Broadcom Inc. AVGO gained 1.97% as it announced a multi-year partnership with Lloyds Banking Group, a British financial institution.
Commodities, Gold, And Global Equity Markets
Crude oil futures were trading lower in the early New York session by 0.05% to hover around $64.02 per barrel.
Gold Spot US Dollar fell 0.09% to hover around $3,656.70 per ounce. Its last record high stood at $3,707.7 per ounce. The U.S. Dollar Index spot was 0.15% higher at the 97.0190 level.
Asian markets closed mixed on Thursday, as China’s CSI 300, Hong Kong’s Hang Seng, and Australia’s ASX 200 indices fell. On the other hand, India’s S&P BSE Sensex, Japan’s Nikkei 225, and South Korea’s Kospi indices rose. European markets were higher in early trade.
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