U.S. stock futures were less volatile, and the Fed’s interest rate cut was in line with market expectations

U.S. stock futures were largely unchanged on Friday as investors digested the Federal Reserve’s latest 25 basis point rate cut decision. The Fed’s rate cut was in line with market expectations, mainly due to a slowdown in the labor market and a decline in inflation. In regular trading on Thursday, the S&P 500 rose 0.74%, the Nasdaq Composite rose 1.51%, and the Dow Jones remained flat, with all three major indexes hitting record highs during the session. The rally is part of a sustained market rally following Trump’s re-election victory, with investors widely pricing in a bias toward deregulation and tax cuts, although there are concerns about tariffs and a widening fiscal deficit.

Summary of market performance

•⁠ ⁠S&P 500: +0.74%, with financials, industrials and technology sectors outperforming.
•⁠ ⁠NASDAQ Composite: +1.51%, led by major technology stocks.
•⁠ ⁠Dow Jones: Flat, as investors’ expectations for policy changes are still being reflected.

Driver analysis

1.⁠ ⁠Fed rate cut expectations fulfilled: The Fed cut interest rates as expected, mitigating the impact of a slowing labor market and weak inflation on the economy, a move that supported the upside of equities.
2.⁠ ⁠Policy outlook after Trump’s re-election: The market expects a new round of tax cuts and regulatory easing to stimulate the economy, but uncertainty over trade policy and deficit issues remains.
3.⁠ ⁠Technology stocks lead the market: Major technology stocks outperformed, with Tesla, Nvidia, Amazon, Apple and Meta all recording significant gains, reflecting investors’ confidence in the continued growth of innovative companies.

Outlook for the market

•⁠ ⁠Uncertainty about policy path: Despite positive signals from rate cuts, further policy easing is likely to go ahead if inflation or employment data come in lower than expected.
•⁠ ⁠Risk sentiment implications: Investors should continue to monitor upcoming employment and inflation data to gauge the Fed’s next policy path. At the same time, ongoing trade policies and geopolitical dynamics are likely to increase market volatility.

Investment strategy advice

In the current policy environment, investors are advised to continue to pay attention to leading stocks in technology, financials and consumer sectors, focusing on the potential benefits brought by policy expectations. In response to high volatility, it is advisable to diversify investments and focus on sectors with greater policy impact, such as industrials and energy.

20,650 points of resistance of the first line above, 20,810 points of resistance of the second line above,
The lower first line support is 20,294 points, and the lower second line support is 19,927 points.

Risk Disclaimer: This report is for informational purposes only and does not constitute financial advice. All investments involve risk and past performance is no guarantee of future results. Please consult your financial advisor for personalized investment advice.