(Reuters) – Futures tracking the benchmark S&P 500 (ES=F) traded above the 6,000-point mark on Friday, with stock markets looking for an optimistic end to an action-packed week that saw Donald Trump regain the U.S. presidency and the Federal Reserve lowered the interest rate.
Futures for all three major indexes were little changed in early trading after S&P 500 futures passed the milestone for the first time on Thursday.
“I can’t say there was a specific catalyst for this move, which seemed more like a continuation of the initial post-election stock gains than anything else,” said Michael Brown, senior research strategist at Pepperstone.
Dow E-minis rose 0.05%, S&P 500 E-minis rose 0.09% and Nasdaq 100 E-minis rose 0.06%.
The Fed cut rates by 25 basis points on Thursday, as expected. At the meeting, Chairman Jerome Powell said the outcome of Tuesday’s presidential election would have no impact on monetary policy in the short term.
Stocks have risen this week after Trump’s decisive election victory, as markets expect proposed tax cuts and a simpler regulatory regime to boost corporate profits and boost stock markets.
“Strong earnings and economic growth, coupled with the strong Fed put, will continue to drive the market higher over the medium term,” Brown said.
However, Trump’s budget spending plans and proposed rate increases could push up inflation, complicating the Fed’s path to easing policy. Traders have lowered expectations for rate cuts next year, and bond yields have risen to a multi-month high.
Still, the immediate impact on Wall Street has been limited. All three major indexes closed around record highs on Thursday.
The Dow Jones and S&P 500 are poised for their best week in nearly a year, while the Nasdaq is on track for its best week in two months.
Investors also eyed the possibility of a ‘Red Sweep’, which would make it easier for Trump to implement his legislative plans, with Republicans retaining their slim majority in the House of Representatives after gaining control of the US Senate.
They will also be closely watching preliminary data from the University of Michigan consumer sentiment survey for November, due later in the day, and Federal Reserve Governor Michelle Bowman’s speech.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Shinjini Ganguli)
