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The Dow Jones today could be off to a hot start thanks to the Fed. Dow futures surged over 250 points higher before trading after Jerome Powell left interest rates untouched.
But the Fed abandoning its rate hike plans may be a troubling sign...
Here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
The Top Stock Market Stories for Thursday
- On Wednesday, seven of the U.S. Federal Reserve's 17 policymakers said they anticipate at least two rate cuts (or a cut by 0.5%) by the end of the year. An eighth policymaker projected a rate cut of 0.25%. That sentiment complemented more dovish language around its plans to handle monetary policy.
- On the trade front, the news isn't so much centered on China as it is on Mexico. A week after the United States avoided tariffs with Mexican imports, Mexico's Senate voted to approve a new trade agreement with its North American trade partners. The legislative body voted almost unanimously to approve the deal that would replace NAFTA. Mexico is the first of the three countries (the others being the United States and Canada) to pass the bill through its legislative arm. The nation's president, Andres Manuel Lopez Obrador, called the passage "very good news" and said the deal represents more jobs and investment in the nation.
- Gold prices rallied to more than $1,360 per ounce in response to the growing sentiment that the Fed will cut interest rates this year - and that the threat of inflation is increasing. Silver prices popped above $15 per ounce and continue to climb as well. This morning, the yield on the U.S. 10-year Treasury bond fell to 1.99%. This is the first time that the 10-year bond has fallen below 2% since November 2016.
- Finally, oil prices are up sharply this morning after Iran shot down a U.S. drone in international airspace. U.S. officials say that an Iranian surface-to-air missile hit the drone over the Strait of Hormuz, raising new concerns about the escalation of tensions in the most important waterway for oil shipments on earth. U.S. officials consider this an unprovoked attack. WTI crude added 2.7% to hit $55.29 per barrel, while Brent crude gained 2.5% and hovered at $63.41.
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Stock to Watch Today: ORCL, WORK, AAPL, SPOT
- Shares of Oracle Corp. (NYSE: ORCL) popped more than 4% in pre-market hours after the company topped Wall Street expectations on Wednesday afternoon. This was a surprise report for the company after multiple Wall Street analysts raised concerns this week about the firm's cloud-computing revenue, its forward guidance, and its ability to compete in a highly crowded sector in the future.
- Today, Slack will go public under the ticker "WORK" with shares priced at $26. The popular business messaging tool isn't quite an IPO as it didn't have a road show, institutional investors backing it, or investment bankers pitching the firm around town. The firm - now valued at $17 billion - will be the first to engage in a direct listing of this size since Spotify Technology SA (NYSE: SPOT) went public in 2018. SPOT stock has been effectively flat since then. A lot of questions will emerge tomorrow as Slack remains unprofitable and the firm has seen its sales slow in its most recent quarter.
- According to Nikkei, Apple Inc. (NASDAQ: AAPL) is considering options to move 15% to 30% of its production capacity from China to other nations in Southeast Asia. The media outlet reported that Apple is in the process of restructuring its supply chain and that its decision was partially based on deteriorating trade relations between the United States and China. However, reports state that Apple still won't change its decision regardless of Washington's ability to strike a new trade deal by the end of the year.
- Look for earnings reports from Red Hat Inc. (NYSE: RHT), Darden Restaurants Inc. (NYSE: DRI), Korn Ferry International (NYSE: KFY), and Luxoft Holding Inc. (NASDAQ: LXFT).