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U.S. stock index futures rose on Wednesday, climbing ahead of a Federal Reserve interest rate decision where the focus will be on how aggressive the central bank thinks it needs to be to get inflation under control.
What’s happening
-
Futures on the Dow Jones Industrial Average
YM00,
+0.43%
rose 161 points, or 0.5%, to 31893. -
Futures on the S&P 500
ES00,
+0.83%
gained 39.25 points, or 1%, to 3963. -
Futures on the Nasdaq 100
NQ00,
+1.36%
increased 195.5 points, or 1.6%, to 12308.
On Tuesday, the Dow Jones Industrial Average
DJIA,
fell 229 points, or 0.71%, to 31762, the S&P 500
SPX,
declined 46 points, or 1.15%, to 3921, and the Nasdaq Composite
COMP,
dropped 220 points, or 1.87%, to 11563. Walmart’s
WMT,
profit warning helped set the tone for a down day on Wall Street.
What’s driving markets
The Fed decision is due at 2 p.m. Eastern, with a press conference from Fed Chair Jerome Powell at 2:30 p.m. Expectations are for a 75 basis point interest rate hike, but there’s uncertainty on what the Fed’s message will be, and whether it lines up a policy pivot after a string of negative economic surveys from both companies and consumers.
Tim Duy, chief U.S. economist at SGH Macro Advisors, says the central bank will want to send a hawkish message but might find it hard to accomplish.
“The easy path to sending that message is to set up another 75bp hike in September, but I don’t think the Fed will do that if, as I suspect, the goal is to reduce the level of guidance while creating a hawkish path that does not require an additional super-sized hike,” said Duy. “It might be a tricky space to navigate; we have always said the Fed will face a communications challenge when it comes time to set the stage for stepping down from 75 bp.”
Durable-goods orders and pending home sales reports for June also are set for release Wednesday.
Alphabet
GOOGL,
and Microsoft
MSFT,
each missed earnings expectations in their reports Tuesday night, though shares of both were up in premarket trade. Among the wave of companies set to report results on Wednesday are plane maker Boeing
BA,
and, after the market close, Facebook parent company Meta Platforms
META,
META,
“Solid reports from tech giants Microsoft and Alphabet have given a fresh boost to market sentiment on Wednesday, sparking hopes that companies can handle tighter monetary conditions and a slower economy,” said Pierre Veyret, technical analyst at ActivTrades.
Also in Washington, the Senate is expected to vote on a bill to boost U.S. semiconductor production.
