Wall Street is likely to open without any major trend on Friday morning, in the wake of the Federal Reserve's latest meeting, which fuelled expectations of rate cuts and pushed indices to new record highs.

Half an hour before the start of trading, futures contracts on the main New York indices are all hovering around equilibrium, suggesting that the day will start at, or close to, a standstill.

As expected, the Fed cut its main key interest rate by a quarter point last night, its second cut in less than two months, while refraining from providing too many clues as to its intentions for the coming months.

Comments made by Fed Chairman Jerome Powell at the press conference following the announcement of the Fed's rate cut nevertheless reinforced the prospect of a continuation of the rate-cutting cycle in the coming months.

Jerome Powell emphasized that the economic downside risks had diminished, but that the policy rate remained above neutral, suggesting that gradual cuts could still take place over time", say economists at Pimco.

"Powell pointed to heightened uncertainty about the economic outlook and, in our view, the Fed will proceed cautiously by slowly bringing rates back towards neutral, while remaining data-dependent", adds the bond specialist.

According to CME's FedWatch barometer

, market participants currently estimate the probability of a further quarter-point rate cut in December at 67.8%. On the fixed-income market, the yield on 10-year US government bonds fell back below 4.32% after peaking at almost 4.78% on Wednesday morning.

Against this backdrop of optimism, the Dow Jones, S&P 500 and Nasdaq Composite all set new all-time highs during yesterday's session, and are all heading for comfortable gains for the week as a whole.

With the monetary meeting now behind us, it's the implications of the Trump Trade that should now take center stage, with all the uncertainties they entail for investors.

According to the teams at J.Safra Sarasin, the President-elect's policy proposals are likely to increase market volatility.

'Deregulation and tax cuts would boost nominal growth, but a trade war would hurt growth and raise prices', says the Swiss private bank.

Investors also seem sceptical about the new economic support measures unveiled in China, which aim to raise the debt ceiling of local governments to replace 'existing hidden debts'.

Under this initiative, the debt ceiling of special local governments will be raised from 29,520 billion yuan to 35,520 billion yuan by the end of 2024.

Some 800 billion yuan of new bonds will also be issued each year to local governments to relieve debt, notably linked to housing projects in disadvantaged areas.

As a result, the amount of hidden debt to be managed by Chinese local authorities should fall from 14,300 billion yuan, to 2,300 billion by 2028, according to Beijing.

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