Fed Chairman's Stance Pressures Equities Amid Ongoing Inflation Concerns

U.S. stock index futures declined after Federal Reserve Chair Jerome Powell signaled no rush to lower interest rates, driving bond yields up while impacting equities sensitive to interest rate changes. Powell cited ongoing economic growth, a strong job market, and inflation above target as reasons for a cautious approach.

U.S. stock index futures saw a decline on Friday, following Federal Reserve Chair Jerome Powell's statement indicating no immediate need to cut interest rates. The announcement led to an increase in bond yields and exerted pressure on rate-sensitive stocks.

In his Thursday speech, Powell highlighted sustained economic growth, a robust job market, and inflation levels above the Fed's 2% target as justifications for a measured strategy regarding future rate cuts. As a result, U.S. Treasury yields rose broadly, and Wall Street's primary indexes finished lower.

This announcement comes amidst expectations that the Fed will maintain rates unchanged at its December meeting, with traders now anticipating a cumulative 73 basis points easing by the end of 2025. Market reactions also reflected concerns over future inflation risks under a possible second term for Donald Trump, affecting stocks of major vaccine manufacturers.

(With inputs from agencies.)