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U.S. equity futures bumped higher in early Thursday trading, while the dollar held near two-year highs and Treasury yields jumped, as markets extended their reaction to yesterday's surprisingly hawkish Federal Reserve rate decision.
Updated at 7:06 a.m. EST
Bank of England holds key rate steady
The Bank of England held its key lending rate steady at 4.75% following its final policy meeting in the year, a close decision that reflects the growth and inflation challenges facing the U.K.'s post-Brexit economy.
The 6-3 vote to hold rates unchanged followed a spike in November inflation that paralleled a surprise contraction in the broader economy,.
"With the heightened uncertainty in the economy we can't commit to when or by how much we will cut rates in the coming year," BoE Governor Andrew Bailey said in a statement.
Stock Market Today
The S&P 500 slumped to a one-month low by the close of trading Wednesday, giving back nearly 3% from the prior session and shedding around $1.8 trillion in market value in the wake of the Fed's final rate cut of the year.
The selloff, the biggest post-Fed decline on record, was tied to the central bank's forecast of just two rate cuts through the whole of 2025, around half their September estimate. The move came amid what it called "somewhat elevated" inflation and a resilient domestic economy.
"The Fed meeting brought back some unwanted clouds of uncertainty over monetary policy next year," said Adam Turnquist, chief technical strategist for LPL Financial in Charlotte.
"At a minimum, market expectations have shifted toward a shallower- and slower-than-anticipated rate-cutting cycle," he added. "Technically, the near-term risk remains to the upside for 10-year Treasury yields, creating a likely headwind for stocks."
Benchmark 10-year note yields, which were trading at around 4.391% prior to the Fed decision yesterday, were last marked at 4.522% in overnight trading, with 2-year notes trading at 4.319%.