U.S. stock index futures experienced an upward surge on Thursday, with significant gains in futures linked to the S&P 500 and Nasdaq, reaching record levels shortly after the U.S. central bank implemented a quarter-point interest rate cut. Notably, Intel saw a remarkable 31% increase in premarket trading after Nvidia announced a substantial $5 billion investment in the company, although Nvidia did not secure a key manufacturing agreement with Intel.
Nvidia’s stock rose by 2.6%, rebounding from previous declines triggered by reports suggesting that Chinese tech firms might reduce purchases of its chips. In contrast, Intel’s peer, Advanced Micro Devices, faced a 2.9% decline.
Following the anticipated interest rate cut, Federal Reserve Chair Jerome Powell emphasized the central bank’s focus on the weakening jobs market, hinting that further rate reductions could be on the horizon during the upcoming October and December meetings. Investors are currently pricing in approximately 44.6 basis points in rate cuts by the end of 2025, suggesting the likelihood of nearly two quarter-point reductions, according to data compiled by LSEG.
Futures tied to the small-cap Russell 2000 index rose by 1.6%, as these smaller companies are expected to thrive in a low interest rate environment. Jean Boivin, head of the BlackRock Investment Institute, described the Fed’s action as a “risk management” cut, designed as a precaution against emerging signs of labor market weakness. He noted that any future policy easing would depend on data confirming that the softness in the labor market is genuine and lasting.
As of 07:12 a.m. ET, Dow E-minis increased by 311 points (0.67%), S&P 500 E-minis rose by 57 points (0.86%), and Nasdaq 100 E-minis climbed by 283.5 points (1.18%). Concerns regarding the Fed’s independence diminished, particularly after attempts by the Trump administration to dismiss Governor Lisa Cook were unsuccessful, with the newly sworn-in Governor Stephen Miran being the sole dissenter calling for a more aggressive 50 basis point cut.
The Fed’s decision is anticipated to add momentum to Wall Street’s recent rally, during which the S&P 500 and Nasdaq notched intraday record highs across multiple sessions, driven by hopes for monetary policy easing and a resurgence in AI-related stocks. Historically, September has been a challenging month for U.S. equities, with the S&P 500 averaging a 1.4% decline since 2000, according to LSEG data.
Additionally, a weekly reading of jobless claims is expected to be released before markets open. In individual stock movements, CrowdStrike saw a positive turn, gaining 6% following upgrades in price targets from at least two brokerages.
