Dow Jones futures rise on bets of further Fed rate cuts this year

• Dow Jones futures climb on expectations the Fed could deliver 50 bps of easing before year-end.
• Fed Chair Jerome Powell struck a cautious tone, stressing there is no urgency to speed up easing.
• US major banks cut their prime lending rates after the Fed's rate reduction.

Dow Jones futures gain 0.35% to trade around 46,200 during European hours on Thursday, ahead of the opening of the United States (US) regular session. Moreover, the S&P 500 futures advance 0.48% to move above 6,600, while Nasdaq 100 futures surge 0.68% to trade near 24,400.

US stock futures rise after the first rate cut of this year by the Federal Reserve (Fed). The US central bank lowered the funds rate by 25 basis points (bps) and signaled a further 50 bps of easing before year-end, slightly above its June projections.

However, Fed Chair Jerome Powell adopted a cautious tone, describing the move as "risk management" amid labor market weakness, while emphasizing there is no urgency to accelerate easing. The newly appointed Governor Stephen Miran favored a larger 50 bps cut, leaving the committee less divided than expected. Moreover, the Bank of Canada (BoC) also cut its policy rate by 25 bps, while the Bank of England (BoE) and Bank of Japan (BoJ) are expected to maintain steady policy this week.

Major US banks, like JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America, lowered their prime lending rates from 7.50% to 7.25% on Wednesday, following the Fed's rate cut. On Wednesday's regular session, the Dow rose 0.57%, while the S&P 500 edged down 0.1% and the Nasdaq fell 0.33%. By sector, financials, consumer staples, and materials outperformed, while technology, industrials, and consumer underperformed.