U.S. Stocks May Give Back Ground After Yesterday’s Rebound

Following the rebound seen in the previous session, stocks may move back to the downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.3 percent.

Concerns about the outlook for interest rates may weigh on the markets ahead of the Federal Reserve’s monetary policy announcement this afternoon.

With the Fed widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement as well as Fed Chair Jerome Powell’s post-meeting press conference.

Recent economic data has led to worries about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group’s FedWatch Tool is currently indicating a 75.3 percent chance rates will be lower by at least a quarter point following the Fed’s June meeting.

The downward momentum on Wall Street also comes as traders look ahead to the release of earnings news from big-name companies like Microsoft (MSFT), IBM (IBM), Meta Platforms (META) and Tesla (TSLA) after the close of today’s trading.

After seeing considerable weakness in the previous session, stocks showed a strong move back to the upside during trading on Tuesday. The tech-heavy Nasdaq led the way higher after posting a particularly steep loss on Monday.

The Nasdaq surged 391.75 points or 2.0 percent to 19,733.59, partly offsetting the 3.1 percent plunge seen during Monday’s session. The S&P 500 also jumped 55.42 points or 0.9 percent to 6,067.70, while the narrower Dow rose 136.77 points or 0.3 percent to 44,850.35.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, with several markets closed for holidays. Japan’s Nikkei 225 Index jumped by 1.0 percent, while Australia’s S&P/ASX 200 Index climbed by 0.6 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is down by 0.4 percent, the U.K.’s FTSE 100 Index is up by 0.3 percent and the German DAX Index is up by 0.7 percent.

In commodities trading, crude oil futures are slipping $0.29 to $73.48 a barrel after climbing $0.60 to $73.77 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,792.50, down $2.10 compared to the previous session’s close of $2,794.60. On Tuesday, gold surged $28.40.

On the currency front, the U.S. dollar is trading at 155.29 yen compared to the 155.54 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0390 compared to yesterday’s $1.0430.