Traders on the floor of the NYSE
Source: 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.
