Dow Jones futures rise after US ends government shutdown

• Dow Jones futures add gains as market sentiment improves after the US government impasse ended.
• President Trump signed the funding to end the longest government shutdown in US history.
• Traders may adopt caution as hawkish Fedspeak diminished Fed rate cut bets for December.

Dow Jones futures added 0.24% to trade above 48,450 during European hours ahead of the opening of the United States (US) regular session on Thursday. Moreover, the S&P 500 futures and Nasdaq 100 gained by 0.23% and 0.36%, with trading near 6,900 and 25,700, respectively.

US index futures rise amid improving market sentiment, driven by the end of the United States (US) government shutdown. US President Donald Trump signed the funding bill on Thursday, ending the record 43-day government shutdown in US history. The bill requires the Government to resume normal operations and call for direct payment for individuals to purchase healthcare.

Traders may adopt caution due to uncertainty surrounding the US economic outlook and Federal Reserve (Fed) policy outlook. Weaker-than-expected private labor data for October strengthened expectations of potential Fed policy easing. However, the likelihood of the Federal Reserve (Fed) rate cut in December faded following recent hawkish Fedspeak. The CME FedWatch Tool shows markets pricing in nearly a 60% chance of a 25-basis-point Fed rate cut in December, down from 67% a day ago.

Atlanta Fed President Raphael Bostic addressed economic trends at the Atlanta Economic Club on Wednesday. Bostic cautioned that easing policy too soon could "feed the inflation beast," while noting that a sharp downturn in the labor market is unlikely in the near term. Meanwhile, Boston Fed President Susan Collins said that "Elevated inflation warrants still mildly restrictive policy," adding that she has not seen "an increase in downside employment risks since the Summer."

On Wednesday's US session, Wall Street posted mixed results, with the Dow Jones rising 0.68% to reach new record highs, while the S&P 500 inched up 0.06% and the Nasdaq 100 declined 0.26%. Health care stocks led the gains, supported by strong performances from Eli Lilly, up 3% and AbbVie, up 3.6%, as solid earnings bolstered sector momentum. Financials also advanced, with Goldman Sachs up 3.5%, JPMorgan 1.5%, and American Express 0.7%. Technology and AI-related stocks weakened, with Tesla down 2.1%, Meta down 2.9%, and Palantir down 3.6%.