The major U.S. index futures are pointing to a modestly lower opening on Thursday following the mixed performance seen in the previous session. Traders continue to digest the Federal Reserve’s monetary policy announcement on Wednesday.
Stocks saw considerable volatility late in the trading day on Wednesday following the Fed announcement. The major averages eventually ended the session mixed, with the Dow and the S&P 500 rising to new record closing highs.
While the Nasdaq edged down 5.28 points or 0.1 percent to 6,456.04, the Dow rose 41.79 points or 0.2 percent to 22,412.59 and the S&P 500 inched up 1.59 points or 0.1 percent to 2,508.24.
The mixed close on Wall Street came after the Fed left interest rates unchanged as widely expected but signaled another rate hike is likely this year.
The Fed’s projections pointed to a quarter basis point rate increase later this year, with the rate hike widely expected to come at the December meeting.
“We had suspected that the recent softness of core inflation could persuade officials to hold off on the next rate hike until next year,” said Andrew Hunter, U.S. economist at Capital Economics.
He added, “Given these latest projections and the broadly unchanged language on inflation in today’s policy statement, we now expect the Fed to push on and raise rates again in December.”
The Fed also revealed that it will begin shrinking its $4.5 trillion balance sheet in October, initially allowing $10 billion in bonds to roll off each month.
In her subsequent press conference, Fed Chair Janet Yellen said the process of winding down the balance sheet would be gradual and predictable.
With the focus on the Fed, traders shrugged off a report from the National Association of Realtors showing an unexpected decrease in existing home sales in the month of August.
NAR said existing home sales slumped by 1.7 percent to an annual rate of 5.35 million in August after tumbling by 1.3 percent to a rate of 5.44 million in July.
The continued decrease surprised economists, who had expected existing home sales to edge up to an annual rate of 5.46 million.
With the unexpected decrease, existing home sales fell to their lowest annual rate since hitting 5.34 million last August.
Oil service stocks moved sharply higher over the course of the trading day, driving the Philadelphia Oil Service Index up by 1.8 percent. The index reached its best closing level in two months. The strength in the sector came amid a notable increase by the price of crude…