THURSDAY – U.S. stock index futures fell on Thursday morning as investors digested the Federal Reserve’s latest announcement on monetary policy as well as a sharp drop in Biogen shares.
At 7:48 a.m. ET, Dow Jones Industrial Average futures indicated a decline of 136 points at the open. Futures on the S&P 500 and Nasdaq 100 also fell.
The Dow closed lower on Wednesday after the Fed announced a more dovish policy. Jerome Powell, the Fed’s chair, said the central bank is forecasting no rate hikes in 2019, which is down from two hikes forecast earlier. U.S. Treasury yields fell on the news, which added pressure on certain stocks, including banks.
Rising rates are good for banks since they are able to lend out money to investors at a profitable rate of interest. Lower interest rates restrict the bank’s ability to make profits thus adding pressure on margins.
The central bank also lowered its growth outlook for the year and indicated it would end its balance-sheet reduction process by the end of September.
U.S.-China trade is also in focus for investors after mixed comments from the White House. President Donald Trump said Wednesday that Washington’s tariffs on Beijing could stay on for a “substantial period of time.”