U.S. stock-index futures ticked slightly higher Wednesday, suggesting equity benchmarks would open near all-time highs, though trading could be muted as investors focus on highly anticipated commentary from the Federal Reserve set to roll out in the afternoon.
Where are the major benchmarks trading?
Futures for the Dow Jones Industrial Average YMU9, +0.00% rose 40 points, or 0.2%, to 26,560. S&P 500 index futures ESU9, -0.05% added 6 points, or 0.2%, to 2,927.50. Nasdaq-100 futures NQU9, +0.17% added 25.5 points to 7,620.75, a gain of 0.3%.
Stocks mostly ended lower on Tuesday, with the Dow DJIA, -0.26% dipping for a second straight session and the S&P 500 SPX, -0.13% extending its recent modest weakness to a third straight session. The Nasdaq COMP, +0.18% however, bucked the trend to rise for a second straight session.
At current levels, the Dow is about 1% below its Sept. 21 record, while the S&P 500 is less than 1% below its Sept. 20 peak. The Nasdaq is about 1.3% below its own record, last hit on Aug. 29.
What’s driving trading?
Investors are looking ahead to a policy decision by the Federal Reserve that is almost unanimously expected to result in a quarter-percentage point interest-rate increase at 2 p.m. Eastern. The meeting will be followed a half-hour later by Fed Chairman Jerome Powell’s news conference during which investors are expected to seek further insight into the state of the economy, the impact of trade issues, and the path of future rate moves.
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Stocks have recently seen modest weakness on Fed days, and there could be additional volatility if Powell gives any commentary about the impact that trade policy is having on the economy.
Issues surrounding trade remained at the top of investors’ list of worries. While Wall Street has repeatedly ignored the threat of rising trade tensions, focusing instead on strong economic data and corporate fundamentals, trade jitters have led to short-term volatility on fears that the situation could spiral out of control.
Earlier this week, Chinese officials fired back against President Donald Trump, accusing him of “trade bullyism” and pushing an “America First” agenda at the cost of international relations. The comments came as the latest exchange of tariffs took effect—10% tariffs on $200 billion worth of Chinese goods, which was met with $60 billion in tariffs on U.S. goods by China.
In addition to the Fed statement, investors are looking ahead to a reading on August new-home sales, which will be released at 10 a.m. ET.
What are market analysts saying?
“With a rate rise today more or less a done deal, attention will be less on the fact that this will be the third rate rise this year, than on how the Fed sees the glide path for further policy actions,” said Michael Hewson, chief market analyst at CMC Markets UK.
“Today’s Federal Reserve meeting will be important in the context of the projections for future inflation and GDP forecasts, but also future expectations of how many more increases in the Fed funds rate we can expect to see between now and the end of next year.”
What stocks are in focus?
Dow component Nike Inc. NKE, +0.62% late Tuesday reported fiscal 2019 first-quarter earnings that were above expectations but said its expenses increased.
Daimler AG DAI, -0.88% announced a shake-up at the top, saying Chief Executive Dieter Zetsche will exit his position after its annual 2019 shareholder meeting.
Square Inc. SQ, +10.82% could remain in focus a day after it posted its best one-day percentage gain in more than a year following positive analyst commentary. The stock has nearly tripled thus far this year, up 175%.
Where are other markets trading?
Shares in Asia were broadly higher, with Hong Kong’s Hang Seng Index up more than 1%. Japan’s Nikkei has risen for seven straight sessions. Major European indexes were also modestly higher, though Germany’s DAX was in slightly negative territory.
Crude oil CLK9, -0.58% fell 0.2% in a slight retreat from a recent rally that has taken prices up about 2% thus far this week. Gold prices GCM9, -0.48% were also down 0.2%. The U.S. Dollar index DXY, +0.19% was up less than 0.1%.
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