Stock futures are rising early Thursday. The market is taking everything in its stride.
Of course it helps when there are no surprises. Inflation may have ticked higher in October but the consumer price index was in line with economists’ expectations. That was enough to prevent the rally from stumbling.
The Republicans won their 218th seat in the U.S. House, the Associated Press projected late Wednesday, giving the party control of both chambers of Congress as well as the presidency. Again, a Republican clean sweep has been expected by markets ever since the election results began to filter in last week. It will make it easier for Donald Trump to pass legislation, which markets like.
The upshot of all that is that stock futures are climbing again early Thursday. Futures on the S&P 500 and Dow Jones Industrial Average were both 0.1% up ahead of the open Thursday, while Nasdaq 100 futures were flat.
All three major U.S. stock indexes edged higher Wednesday as investors digested CPI data showing that inflation rose at an annual rate of 2.6%, up from 2.4% in September. The S&P 500 has now closed higher six of the past seven trading days.
Despite the uptick, traders emboldened their view that another rate cut is coming in December–now seeing an 83% chance of a quarter-point reduction, up from 59% early Wednesday, according to CME’s FedWatch tool.
The market’s so-called ‘fear gauge’, the CBOE Volatility Index (VIX) fell around 5% Wednesday to its lowest close since July.
But serenity is never long lasting when it comes to markets. Inflation data will once again be in focus Thursday, this time as the producer price index is released.
Federal Reserve Chair Jerome Powell could be the man to disrupt the tranquility. Powell dismissed questions over the impact of Trump’s potential policies on interest rates last week, but the central bank boss will speak again at the Dallas Regional Chamber later on Thursday.