By Shreyashi Sanyal

(Reuters) – U.S. stock futures rose on Thursday as the Federal Reserve declared a quicker winding down of its pandemic-era stimuli, calming nerves about surging prices.

The U.S. central bank said on Wednesday it would end its bond purchases in March and signaled three quarter-percentage-point interest rate hikes by the end of 2022.

Jerome Powell, Fed chair, said that America’s economy does not need increasing levels of support for its economy. Inflation has exceeded the bank’s targets in the past months and the economy is close to full employment.

The benchmark is getting closer to breaking records due to recent anxiety-inducing readings regarding surging producer, consumer and Omicron virus prices.

Is there a Santa Rally? The markets certainly have a spring in them…the prospect of three interest rates hikes in 2022 would indicate that the central bank has a clear strategy to keep inflation under control,” Russ Mould (investment director at AJ Bell) wrote in a client letter.

Equally, the Fed isn’t trying to be too aggressive in order to halt the economy. A sense of balance is what investors seek, and a positive tone from Fed sure seems to have rub off on the markets.

The gains in premarket trades were led by banks and technology companies. Tesla Inc shares Microsoft Corp (NASDAQ :), Apple Inc. (NASDAQ :), Meta Platforms Inc. and Amazon.com Inc. (NASDAQ 🙂 saw their shares rise between 0.7% to 2.4%.

Bank stocks including JPMorgan Chase & Co (NYSE:), Morgan Stanley Bank of America (NYSE 🙂 Wells Fargo (NYSE: Citigroup (NYSE) Gained 0.7% to 0.8%

6.53 a.m. ET were up by 255 points or 0.71%. They were also up 38.5 points or 0.82% and up 147.25 point, or 0.9%.

Investors also await data from Labor Department regarding weekly jobless claims. This is expected to increase to 200,000 from 184,000 the previous week.

IHS Markit, a data company, is also scheduled to publish December manufacturing, service, and composite PMI survey results.

Lennar Corp (NYSE 🙂 dropped 7.0% after analysts missed estimates for quarter-end profit. This was due to the fact that homebuilder Corp fell short of analyst expectations. The pandemic-driven supply chain issues caused by lumber shortages pushed lumber prices higher, causing delays in house deliveries.