After moving mostly higher over the two previous sessions, stocks may give back ground in early trading on Wednesday. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.
Traders may look to cash in on recent strength in the markets ahead of the Federal Reserve’s monetary policy decision this afternoon.
Since the Fed is widely expected to raise interest rates by another 25 basis points, traders will be focused on the accompanying statement for clues about the outlook for interest rates.
Traders are optimistic the rate hike will be the last following recent encouraging inflation data, but the Fed may not offer as much confirmation as they hope.
“They will probably signal that they want to see the impact of the current tightening cycle and that they will probably skip raising rates in September,” Edward Moya, senior market analyst at OANDA, said of the Fed. “They will likely be clear in suggesting that more tightening could very well happen.”
A steep drop by shares of Microsoft (MSFT) may also weigh on the markets, with the software giant tumbling by 3.6 percent in pre-market trading
Microsoft has come under pressure after reporting better than expected fiscal fourth quarter results but providing disappointing revenue guidance for the current quarter.
Meanwhile, shares of Alphabet (GOOGL) are moving sharply higher in pre-market trading after the Google parent reported second quarter earnings that exceeded analyst estimates.
Coca-Cola (KO), Boeing (BA) and AT&T (T) are also likely to see initial strength after reporting better than expected quarterly results.
Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of June. New home sales are expected to pull back to an annual rate of 725,000 in June after surging to a rate of 763,000 in May.
Stocks fluctuated over the course of the trading day on Tuesday but largely maintained a positive bias throughout the session. While the tech-heavy Nasdaq outperformed its counterparts, the Dow managed to close higher for the twelfth straight session.
The Nasdaq climbed 85.69 points or 0.6 percent to 14,144.56 and the S&P 500 rose 12.82 points or 0.3 percent to 4,567.46, reaching its best closing level in over a year. The Dow pulled back off its best levels going into the close but still inched up 26.83 points or 0.1 percent to 35,438.07.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index closed just below the unchanged line, while China’s Shanghai Composite Index fell by 0.3 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index has plunged by 1.9 percent, the German DAX Index is down by 1.0 percent and the U.K.’s FTSE 100 Index is down by 0.6 percent.
In commodities trading, crude oil futures are sliding $0.76 to $78.87 a barrel after climbing $0.89 to $79.63 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,973.90, up $10.20 compared to the previous session’s close of $1,963.70. On Tuesday, gold inched up $1.50.
On the currency front, the U.S. dollar is trading at 140.28 yen compared to the 140.90 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1063 compared to yesterday’s $1.1055.
Business News
U.S. Stocks May Give Back Ground Ahead Of Fed Announcement
2023-07-26 12:51:22
