Traders on the floor of the NYSE
Dow Jones Industrial Average futures slipped Wednesday as investors looked ahead to the Federal Reserve’s Wednesday meeting.
Futures tied to the Dow shed 116 points, or 0.3%. S&P 500 futures were down 0.2%. Meanwhile, Nasdaq-100 futures were little changed.
Corporate earnings season continued. Peloton shares rose more than 4% in premarket trading after the fitness equipment company said its net loss narrowed year over year. Advanced Micro Devices shares gained more than 3% after the semiconductor company reported a fourth-quarter earnings beat. Meanwhile, Snap shares dropped more than 15% after the social media company posted a disappointing quarterly revenue.
The Fed at 2 pm ET will announce how much it is increasing interest rates in its latest effort to tame high inflation. Markets are expecting a 25 basis point, or 0.25 percentage point, bump from the central bank. On Tuesday, the employment cost index, a measure of wage increases, showed compensation rose 1% in the fourth quarter, less than the 1.1% estimate by Dow Jones. The Fed’s announcement will be followed by comments from Chair Jerome Powell.
Still, traders may be getting ahead of themselves in expecting a more dovish tone from the Fed, or looking for signs that a pause in hikes or even a pivot is coming soon.
The Fed’s message Wednesday “will push back against the pivot narrative and thereby current bond market pricing,” wrote DoubleLine’s Jeffrey Gundlach in a tweet. “Should be interesting.”
Wall Street is coming off a strong session to end January. The Dow ended Tuesday nearly 369 points higher, rising by 1.09%. The S&P 500 gained 1.46% to cap its best January performance since 2019. The tech-heavy Nasdaq Composite rose 1.67%, notching its best January performance in 22 years.