US pre-open: Wall Street set to open near record highs, Slack IPO in focus
Stocks are set for sharp gains on Thursday, despite the heightened tensions in the Persian Gulf after the US central bank left the door open to cutting official short-term interest rates in 2019 should the economic outlook warrant it.
Overnight, Federal Reserve chairman, Jerome Powell, pledged to do what it takes to keep the US economic expansion going, with the economic projections published alongside the policy statement revealing that 7 of 17 FOMC menbers believe two interest rate cuts will be needed in 2019.
On the back of the news, as of 1244 BST, futures were pointing to opening gains of 216 points to 26,752.0 for the Dow Jones Industrials and of 25.25 points to 2,958.75 for the S&P 500, while the Nasdaq-100 was seen ahead by 96.50 points at 7,798.50.
"Now that investors feel that the Fed has their back, it's over to Trump and Xi to deliver the news they truly desire," said Oanda analyst Craig Erlam.
"All differences won't be resolved during their prolonged meeting next week but if tariffs can be avoided and a deal put back on the table in the coming weeks or months, investors will be very relieved which could be supportive for equity markets heading into the summer period."
In corporate news, Slack was set to debut on the NYSE via a so-called direct listing, having set a reference price of $26 per share for its stock market float, valuing the messaging service at approximately $15.7bn.
Shares of cruise line operator Carnival on the other hand were expected to plummet by 8% after the company slashed its full-year outlook, although its fiscal second quarter earnings did come in ahead of analysts' forecasts.
Carnival said that pricing on bookings since March were running below year ago levels and that a US government ban on cruises to Cuba would cuts its eanrings per share by four to six cents.
Full-year earnings per share were now pegged at $4.25-4.35, down from $4.35-4.55 before.
Crude oil and gold futures were also moving sharply higher, after Iran's Revolutionary Guard shot down a US military drone, near the entrance to the Strait of Hormuz
Front month West Texas Intermediate crude oil futures were climbing 3.45% to $55.9 a barrel on the NYMEX and August-dated gold futures on COMEX jumping by 2.65% to $1,384.50/oz..
US dollar weakness in the aftermath of the FOMC's decision was also boosting commodity prices, with the US dollar spot index down by 0.50% to 96.6320.
Iran's military said it was shot down inside its airspace, near Kuh Mobarak, but the US disputed that claim, saying that it occured in international airspace.
Weekly initial jobless claims data and first quarter current account figures were both scheduled for release at 1330 BST, alongside the Philly Fed's regional factory sector index.