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Market Snapshot: U.S. stocks open mostly higher as market awaits possibly the biggest Fed rate hike since 2000

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
YM00,
+0.29%

rose 121 points, or 0.3%, to 33,151

S&P 500 futures
ES00,
+0.32%

rose 0.4% to 4,185

Nasdaq-100 futures
NQ00,
+0.19%

rose 0.2% to 13,120

On Tuesday, the Dow industrials
DJIA,
+0.20%

rose 67.29 points, or 0.2%, to close at 33,128.79, the S&P 500 
SPX,
+0.48%

gained 0.5% to finish at 4,175.48. The Nasdaq Composite 
COMP,
+0.22%

added 0.2% to end at 12,563.76.

Read: ‘Bubble stocks popped’ but it’s still not safe to buy them, says Ray Dalio, founder of world’s biggest hedge fund

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.

Read: Fed on track for biggest rate hike since 2000

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
BRN00,
+3.41%

BRNN22,
+3.41%

and West Texas Intermediate crude
CL00,
+3.55%

CL.1,
+3.55%

CLM22,
+3.55%

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.
MRNA,
+3.14%
,
CVS Health Corp.
CVS,
-0.54%

and Yum Brands Inc.
YUM,
-0.60%

among those reporting ahead of the open. After the close, results are expected from eBay Inc.
EBAY,
+0.58%

and Etsy Inc.
ETSY,
+3.56%
,
among others.

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