US stock futures, including Dow Jones and S&P 500, remained steady during European hours on Thursday, with Dow Jones futures around 46,530 and S&P 500 futures at 6,670. Nasdaq 100 futures edged lower by 0.17% to near 24,600 at the time of writing [1]. This stability followed a sharp sell-off in the previous session, where the Dow Jones Industrial Average dropped 1.63% to its lowest level since November, and the S&P 500 and Nasdaq Composite fell 1.36% and 1.46%, respectively [1].
Market sentiment has grown cautious due to a more hawkish tone from the US Federal Reserve. The Fed kept interest rates unchanged at 3.50%–3.75% during its March meeting. Fed Chair Jerome Powell stated that inflation is expected to ease gradually, but the pace of disinflation may be slower than previously anticipated. Powell also warned that rising oil prices, linked to the Iran conflict, could add near-term upward pressure on inflation [1].
The Federal Reserve highlighted uncertainty regarding the economic impact of the Iran war and noted elevated upside risks to inflation. Policymakers indicated that rate cuts will likely be delayed until there is clearer evidence of easing price pressures. However, projections still suggest one rate cut this year and another in 2027, consistent with the December outlook [1].
On the data front, US producer prices rose more than expected in February, reinforcing persistent inflationary pressures beyond energy. The Producer Price Index (PPI) increased 0.7% month-over-month, up from 0.5% in January and well above expectations of 0.3%, marking the largest gain in seven months. Year-over-year, headline PPI rose to 3.4%, while Core PPI accelerated to 3.9% from 3.5% previously. Investors are now awaiting weekly jobless claims for further insight into labor market conditions [1].
CONCLUSION
The Federal Reserve's hawkish stance and stronger-than-expected inflation data have led to cautious market sentiment and delayed expectations for rate cuts. While futures are steady after a sharp sell-off, investors remain focused on upcoming labor market data for further direction. Persistent inflation and geopolitical risks continue to weigh on the outlook.