U.S. stock futures rise after hawkish Fed dents Wall St

U.S. stock index futures rose on Thursday evening, with Wall Street eying some recovery after the Federal Reserve hiked interest rates for the first time in three years.

Markets were also encouraged by a Reuters report that U.S. officials held secret Oman talks with Yemen’s Iran-aligned Houthis, spurring some hopes over an easing in Middle East tensions. Oil prices fell sharply from recent peaks.

S&P 500 Futures rose 0.48% to 7,659.0 points by 20:05 ET (00:05 GMT). Nasdaq 100 Futures rose 0.67% to 29,446.50 points, while Dow Jones Futures rose 0.50% to 52,175.0 points.

Gains in Nasdaq futures pointed to a sharp rebound in technology stocks, with the progress of a bill aimed at regulating data center power costs also providing some support.
Among notable aftermarket movers, Snap Inc (NYSE:SNAP) rose 2.5% after it said it will partner with NVIDIA Corporation (NASDAQ:NVDA), Amazon.com Inc (NASDAQ:AMZN), and Salesforce Inc (NYSE:CRM) to bring its augmented reality glasses to the enterprise market.

Generac Holdings Inc (NYSE:GNRC) rallied over 30% after Amazon was granted warrants to buy up to $340 million worth of stock in the company as part of a power supply deal.

Wall St dips after Fed hikes rates, Warsh presents hawkish outlook
Wall Street indexes slid on Wednesday after the Federal Reserve hiked rates by 25 basis points to 4.0%. The move was the central bank’s first hike in three years.
Fed Chair Kevin Warsh struck a hawkish tone in his post-meeting remarks, warning that inflation still remained “too high,” and that financial conditions were not restrictive enough.

While Warsh did not provide forward guidance, his comments were widely interpreted as hawkish, given that a concentrated effort to bring down inflation is likely to entail higher interest rates.

But plans for higher rates also potentially put Warsh at odds with President Donald Trump, who has repeatedly called for lower rates to support economic growth.

Trump, in a social media post following the Fed decision, said interest rates should be 1% or less. He later told reporters that interest rates were too high and were “not appropriate.”

Trump said he had confidence in Warsh, but that the Fed chair had a “very tough board.”

Higher rates bode poorly for Wall Street, especially for the high-flying tech sector that has driven a bulk of equity gains in recent years.

Falling oil prices lend support
Markets were also encouraged by a sharp drop in oil prices on Wednesday and early-Thursday, following a Reuters report that the U.S. and the Houthis had held talks.

U.S. and Houthi representatives met over the weekend, where the Yemeni group said it had no intent of attacking U.S. or Israeli ships.

News of the talks spurred some hopes that the Houthis will ease their offensive against Saudi Arabia following strikes on several key energy hubs over the past week.