Stock Futures Slip After Two-Day Fed-Fueled Rally

New York (Sept 23)  Stock futures edged lower after two days of record closes for the Nasdaq amid relief over the Federal Reserve's patience on raising interest rates.

S&P 500 futures were down 0.17%, Dow Jones Industrial Average futures fell 0.11%, and Nasdaq futures slipped 0.17%.

Stocks have rallied since Wednesday when the Fed opted to leave rates unchanged for another month and underlined that while the case for an interest rate hike had strengthened, caution had prevailed. The dot-plot forecast and comments from Fed Chair Janet Yellen supported the case for gradual tightening after a small increase in rates this December, as is widely anticipated.

The majority of investors are now pricing in the likelihood of a rate hike in December. Chances are now at 52%, according to CME Group fed funds futures, up from 48% before the announcement on Wednesday.

A number of Fed bank presidents will be pressed to justify the decision to delay a hike when they meet on Friday. Regional Fed presidents including Philadelphia's Patrick Harker, Atlanta's Dennis Lockhart and Cleveland's Loretta Mester will address a panel discussing the central bank's role and responsibilities in Philadelphia on Friday.

Crude oil prices fluctuated on Friday on Reuters reports that Saudi Arabia is willing to reduce oil output if Iran freezes its own this year. Members of the Organization of Petroleum Exporting Countries have recently flirted with the idea of a production freeze agreement, but have been reluctant to cede market share. Major oil producers will convene in Algeria next week to discuss a supply glut.

Source: TheStreet