Futures up on Feds dovish rate hike outlook

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U.S. stock index futures rose on Thursday after the Federal Reserve raised interest rates for the first time this year, but indicated it was in no hurry to increase the pace of tightening. Drawing on continued strength in the labor market and inflation trending just below its 2 percent target, the central bank on Wednesday raised rates by a quarter point to 0.75-1.00 percent. Wall Street ended with solid gains on Wednesday after Fed Chair Janet Yellen expressed confidence in the U.S. economy and said high stock prices were a signal of easier financial conditions. The Fed, however, stuck to its outlook for two more rate hikes this year and three more in 2018. Shares of big U.S. banks, which slipped on the Fed's dovish stance on Wednesday, were up between 0.5 and 1.5 percent in premarket trading. Donald Trump's election as U.S. President in November set Wall Street on a record-setting rally on hopes that he would boost the economy through fiscal stimulus, simpler regulations and tax reforms. Gold hit a one-week high, while the dollar, which had risen on expectations of a more hawkish Fed, hit a one-month low.

Oil prices rose about 1 percent, supported by a weaker dollar and data that showed U.S. inventories had dipped after rising for nine weeks. [O/R]Investors will turn their attention to economic data, while looking for more clarity on Trump's proposed policies. A Commerce Department report is expected to show housing starts edged up to 1.26 million-unit rate in February from 1.25 million units the previous month. The report is due at 8:30 a.m. ET (1230 GMT).

Also due is a Labor Department report, which is likely to show the number of Americans who applied for unemployment benefits fell by 3,000 to 240,000 last week. Shares of Tesla (TSLA. O) rose 2.3 percent to $261.58 after the electric carmaker said it would raise about $1.15 billion as the company speeds up the launch of its Model 3 sedan. Biogen (BIIB. O) slipped 2.2 percent to $286 after Morgan Stanley and Leerink downgraded the drugmaker's stock and cut price targets.

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Fed raises rates as job gains, firming inflation stoke confidence WASHINGTON The U.S. Federal Reserve raised interest rates on Wednesday for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target.

Oil extends gains as dollar and U.S. inventories fall LONDON Oil prices rose for a second day on Thursday, supported by U.S. data showing crude inventories had dipped after rising for nine weeks and a weaker dollar after the U.S. Federal Reserve signaled it would not hike rates faster than expected.