Equity futures rose slightly on Wednesday as traders anticipated a possible interest rate hike announcement from the Federal Reserve later in the day.
Dow Jones Industrial Average futures gained 60 points, or 0.2%. S&P 500 futures also climbed 0.2% and Nasdaq 100 futures traded just above the flatline.
Investors expect the central bank to make its third consecutive rate hike of 0.75 percentage points to rein in high inflation. A higher-than-expected consumer price index in August and hawkish comments on rate hikes from Fed leaders weighed on stocks, with more pressure likely to come as the central bank continues to struggle against the ‘inflation.
“We’ll never really know if the stock market lows are for the year without successfully testing the June lows,” John Lynch, chief investment officer at Comerica Wealth Management said in a Tuesday note. “Certainly the recent technical weakness in stock prices must now be met with the determination of monetary policy makers in their fight against inflation.”
Investors will also be watching earnings from Lennar, KB Homes, General Mills and Steelcase on Wednesday. Existing home sales will also be released on Wednesday.
Treasury yields fell on Wednesday after hitting levels not seen in more than a decade. The 2-year rate, which hit its highest level since 2007 in the previous session, last fell about 2 basis points to 3.948%. The benchmark 10-year yield slipped to 3.54% after hitting its highest level since 2011.
Shares fell on Tuesday, the first day of the Federal Open Market Committee meeting. The Dow lost 1.01%. The S&P 500 and the Nasdaq Composite fell 1.13% and 0.95% respectively.