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Micron Technology ( MU ) plummets after downbeat quarterly

forecast

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Lennar ( LEN ) down after Q4 results come in below estimates

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Futures up: Dow 0.43%, S&P 500 0.50%, Nasdaq 0.43%

(Updates with quote, prices)

By Medha Singh and Purvi Agarwal

Dec 19 (Reuters) - U.S. stock index futures rose on

Thursday as investors digested the Federal Reserve's projections

of fewer-than-expected interest rate cuts and higher inflation

next year that pummeled Wall Street a day earlier.

The Fed on Wednesday said it expects to make just two 25

basis point cuts in 2025, half a percentage point less than its

September forecast and raised inflation expectations for the

first year of the new Trump administration, sending the three

main U.S. stock indexes to their sharpest daily declines since

August.

Traders now see just one quarter-point rate reduction by

mid-2025, and see less than two cuts in total by the end of the

year, compared with last week's expectations of three rate cuts.

"Projecting only two rate cuts next year indicates that the

Fed acknowledges the ongoing 'remarkable' strength of U.S.

economic conditions and suggests that further reductions in

their policy rate may not be necessary," said JoAnne Bianco,

partner and investment strategist at Bondbloxx.

The benchmark S&P 500 hit a near one-month low on

Wednesday as investors adjusted their risk exposure to reflect

the impact of higher borrowing costs in 2025, while the Dow

dropped for the tenth straight session, its longest

streak of losses since 1974.

At 7:02 a.m. ET, Dow E-minis were up 180

points, or 0.43%, S&P 500 E-minis were up 29.5 points,

or 0.50% and Nasdaq 100 E-minis were up 91.25 points, or

0.43%.

The hawkish shift from the Fed comes just three months after

the U.S. central bank began its monetary easing cycle with a

larger-than-usual 50 basis point interest rate cut that spurred

risk appetite and helped push Wall Street to record levels.

Since then improving U.S. economic data and the prospects of

higher inflation under Donald Trump's second U.S. presidential

term have weighed on the Fed's view.

"If the Fed is holding off on a belief that we're seeing an

end to disinflation, then equity faces renewed headwinds and

drawdown," said Chris Weston, head of research at Pepperstone.

The CBOE volatility index, Wall Street's fear

gauge, eased to 20.91 points from a four-month high of 28.32 a

day earlier.

Thursday's data docket includes a final reading of gross

domestic product for the third quarter, alongside weekly jobless

claims data.

Stocks broadly recovered some ground in premarket trading

from sharp losses on Wednesday. Megacap Tesla and

Nvidia ( NVDA ) gained over 2% each.

Among corporate news, Micron slumped 14.5% after its

forecast of quarterly revenue and profit below estimates.

Accenture ( ACN ) gained 5.6% as the IT services

provider

beat

Wall Street estimates for first-quarter revenue, while

homebuilder Lennar ( LEN ) shed 10.4% after

reporting

fourth-quarter results below estimates.

SentinelOne ( S ) rose 3.1% as Jefferies upgraded the

cybersecurity firm's shares to "buy" from "hold."