US stock futures steady after Wall St soars on dovish Powell; Nvidia earnings due
Investing.com -- Homebuilder and mortgage company stocks rallied Friday as short-term Treasury yields posted their biggest drop in a year, following weaker-than-expected jobs data that increased expectations for Federal Reserve interest rate cuts.
Rocket Companies (NYSE:RKT) stock surged 16%, while Mr. Cooper Group (NASDAQ:COOP) jumped 15% and loanDepot (NYSE:LDI) gained 8%. Homebuilders also saw significant gains, with D.R. Horton (NYSE:DHI) rising 5%, Lennar (NYSE:LEN) up 3%, PulteGroup (NYSE:PHM) climbing 3%, and Toll Brothers (NYSE:TOL) advancing 2.4%.
The rally came as traders increased bets that the Federal Reserve would begin cutting interest rates sooner than previously anticipated. The soft employment report prompted a sharp decline in short-term Treasury yields, with the biggest single-day drop in a year.
Housing-related stocks are particularly sensitive to interest rate expectations, as lower rates typically reduce mortgage costs, potentially stimulating home buying activity and refinancing demand. Mortgage companies like Rocket and loanDepot stand to benefit from increased loan origination volume, while homebuilders could see improved demand for new construction as borrowing costs decline.
The market reaction highlights how closely housing sector stocks are tied to interest rate expectations, with investors positioning for potential Fed policy shifts following the disappointing jobs report.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.