U.S. Stocks May Lack Direction Ahead Of Fed Announcement

Following the sharp pullback seen in the previous session, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by just 0.1 percent.

Traders may be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement later this afternoon.

CME Group’s FedWatch Tool is currently indicating a 99.0 percent chance the Fed will once again leave interest rates unchanged.

With the Fed almost universally expected to leave rates unchanged, traders will look to the accompanying statement as well as officials’ latest projections for clues about the outlook for rates.

The FedWatch Tool currently suggests the Fed is likely to leave rates unchanged again at its next meeting in early May, but the chances of a rate cut increase in June and July.

At the Fed’s most recent meeting in late January, the central bank left rates unchanged after it lowered rates by a total of 100 basis points or 1.0 percentage point over the three previous meetings, beginning with a 50 basis point cut last September.

Stocks moved sharply lower during trading on Tuesday, giving back ground following the significant rebound seen over the two previous sessions. The major averages all moved to the downside, with the tech-heavy Nasdaq leading the pullback.

The major averages ended the day off their worst levels but still firmly negative. The Nasdaq tumbled 304.55 points or 1.7 percent to 17,504.12, the S&P 500 slumped 60.46 points or 1.1 percent to 5,614.66 and the Dow slid 260.32 points or 0.6 percent to 41,581.31.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index dipped by 0.3 percent, while Hong Kong’s Hang Seng Index inched up by 0.1 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.2 percent, the U.K.’s FTSE 100 Index is down by 0.2 percent and the German DAX Index is down by 0.7 percent.

In commodities trading, crude oil futures are slipping $0.09 to $66.81 a barrel after falling $0.68 to $66.90 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,045.50, up $4.70 compared to the previous session’s close of $3,040.80. On Tuesday, gold surged $34.70.

On the currency front, the U.S. dollar is trading at 149.60 yen compared to the 149.27 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0912 compared to yesterday’s $1.0945.