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U.S. stock futures moved higher 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,
+0.35%
rose 117 points, or 0.3%, to 33,150 -
S&P 500 futures
ES00,
+0.40%
rose 0.3% to 4,185 -
Nasdaq-100 futures
NQ00,
+0.34%
rose 0.3% to 13,126
On Tuesday, the Dow industrials
DJIA,
rose 67.29 points, or 0.2%, to close at 33,128.79, the S&P 500
SPX,
gained 0.5% to finish at 4,175.48. The Nasdaq Composite
COMP,
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.
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.
The yield on the 10-year Treasury note
TMUBMUSD10Y,
was steady at 2.957%, while that of the 2-year
TMUBMUSD02Y,
was up 2 basis points to 2.776%.
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,
BRNN22,
and West Texas Intermediate crude
CL00,
CLM22,
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,
and Yum Brands Inc.
YUM,
among those reporting ahead of the open. After the close, results are expected from eBay Inc.
EBAY,
and Etsy Inc.
ETSY,
among others.
Which companies are in focus?
-
Lyft Inc.
LYFT,
-2.35%
stock tumbled 27% in premarket trading after the ride-hailing group reported a better-than-expected first quarter, but profit and sales guidance disappointed. Shares of rival Uber Technologies Inc.
UBER,
-3.03%
fell around 5%, as the company said it would release its own earnings announcement earlier, ahead of Wednesday’s market open. -
Herbalife Nutrition Ltd.
HLF,
+3.07%
slid 16% towards a two-year low after the multilevel marketing company announced forecast reductions due to newer “distribitors. -
Airbnb Inc.
ABNB,
-5.09%
shares climbed 5% after the lodging-booking company reported forecast-beating results and said it surpassed 100 million nights booked in a quarter for the first time. -
Match Group Inc.
MTCH,
-2.07%
stock tumbled 6% after the online-dating company’s revenue outlook fell short of expectations. -
Starbucks Inc.
SBUX,
-1.38%
stock rose 4% after the coffee giant reported in-line earnings, amid rising costs and inflation and thinner margins. Chief Executive Howard Schultz said “record” demand was helping accelerate store-growth plans.
How did other assets fare?
-
The ICE U.S. Dollar Index
DXY,
-0.05% ,
a measure of the currency against a basket of six major rivals, was down 0.3%. -
Gold futures
GC00,
-0.17%
slipped, with gold for June delivery
GCM22,
-0.17%
eased modestly to to $1,869.50 an ounce. -
Bitcoin
BTCUSD,
+3.63%
was up 1.8% at $38,993 -
In European equities, the Stoxx Europe 600
SXXP,
-0.52%
fell 0.5%. London’s FTSE 100
UKX,
-0.56%
dropped 0.5%. -
In Asia, the Hang Seng Index
HSI,
-1.10%
fell 1.1% in Hong Kong, while many other Asian markets remained closed for a holiday.
