U.S. stock futures edgedhigher on Wednesday, ahead of the outcome of a two-day Federal Open Market Committee meeting that is expected to deliver the first 50 basis-point interest rate hike since 2000.
Futures were moving higher alongside oil prices, up on news that the EU has proposed a ban on Russian oil.
How are stock-index futures trading?
Dow Jones Industrial Average futures
rose 121 points, or 0.3%, to 33,151
S&P 500 futures
rose 0.4% to 4,185
rose 0.2% to 13,120
On Tuesday, the Dow industrials
rose 67.29 points, or 0.2%, to close at 33,128.79, the S&P 500
gained 0.5% to finish at 4,175.48. The Nasdaq Composite
added 0.2% to end at 12,563.76.
What’s driving markets?
Alongside a half-point interest rate hike, the Fed is expected to announce the start of “quantitative tightening,” when the central bank’s decision is announced at 2 p.m. Eastern Time. Investors will also focus on a news conference with Fed Chairman Jerome Powell at 2:30 p.m. Eastern Time.
Clarity from the Fed on size and scope of future rate increases could give beleagured stocks a lift, say some analysts.
“With financial conditions tightening ahead of the Fed’s interest rate decision, the Fed could be more dovish. Since the Fed’s last meeting, the 10-year yield topped 3% for the first time since 2018 (today), the U.S. dollar rallied 5%, the S&P 500 has fallen 8.74%, and hedge fund exposures fell to a 1.5-year low,” said the Saxo Bank strategy team, in a note to clients.
A slightly more dovish Fed could lead to a short-term rally for hard-hit tech and cyclical stocks, they said. “Keep in mind though, the longer-term picture is still very bearish, medium and longer-term, as the Fed is taking out $1 trillion a year out of the system and the economy is expected to slow,” said Saxo strategists.
Ahead of Friday’s nonfarm payroll data, investors will get the ADP private-sector employment report at 8:15 a.m. Eastern Time, a March update on the trade balance, due at 8:30 a.m., followed by the Institute for Supply Management’s April services index at 10 a.m. Eastern.
Oil was also in focus, with prices for both Brent
and West Texas Intermediate crude
up over 3% each after the European Union proposed banning Russian oil imports under a phased six-month plan, and refined products within a year.
The move would be part of a sixth batch of EU sanctions against Russia over its invasion in Ukraine that began in late February.
Investors will get a fresh batch of earnings on Wednesday, with Moderna Inc.
CVS Health Corp.
and Yum Brands Inc.
among those reporting ahead of the open. After the close, results are expected from eBay Inc.
and Etsy Inc.