Traders on the NYSE floor
Source: NYSE
Stock futures fell on Wednesday as investors awaited the Federal Reserve meeting on Wednesday.
Futures tied to the Dow Jones Industrial Average lost 140 points, or 0.4%. S&P 500 and Nasdaq Composite futures were down 0.4 percent and 0.3 percent, respectively.
The Federal Reserve will announce at 2pm ET how much it is raising interest rates in its latest attempt to tame high inflation. Markets expect a rise of 25 basis points, or 0.25 percentage points, from the central bank. On Tuesday, the employment cost index, a measure of wage gains, showed compensation rose 1 percent in the fourth quarter, less than the Dow Jones estimate of 1.1 percent.
Still, traders may be ahead in anticipation of a more dovish tone from the Fed or looking for signs that a pause in hikes or even a pivot is imminent.
“Aggressive tightening in 2022 led to signs of a slowdown in inflation, but from levels that remain unacceptably high,” said Ron Temple, chief market strategist at Lazard in a note on Tuesday. “With a 25 basis point hike already discounted by markets, Powell’s task is to signal unequivocally the Fed’s commitment to taming inflation.”
The Fed’s announcement will be followed by comments from Chairman Jerome Powell.
Wall Street is coming off a strong session through the end of January. The Dow ended Tuesday nearly 369 points higher, up 1.09%. The S&P 500 rose 1.46% to post its best January performance since 2019. The tech Nasdaq Composite rose 1.67 percent, marking its best January performance in 22 years.
Earnings season is also underway. Peloton and Meta Platforms are scheduled to report quarterly results on Wednesday.
Shares of Snap fell more than 15% after the social media company posted disappointing quarterly earnings. The company’s average revenue per user, a key metric for Snap, also came in below expectations. Meanwhile, AMD reported better-than-expected earnings and revenue, but warned of a 10% decline in the top line in the first quarter.
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