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Stock futures rise as investors await the Federal Reserve’s interest rate decision on Wednesday


Stock futures rose on Wednesday morning as investors await the Federal Reserve’s final decision on raising interest rates in its effort to crush inflation, due on Wednesday.

Dow Jones Industrial Average futures rose 112 points, or 0.33%. Futures tied to the S&P 500 and Nasdaq 100 rose 0.35 percent and 0.38 percent, respectively.

Stocks rose for a second day during regular trading on Tuesday, fueled by a cooler than expected inflation report. The consumer price index in November was 7.1 percent year-on-year, less than the 7.3 percent increase expected by economists polled by Dow Jones. The 0.1% increase from the previous month was also less than forecast.

The signal that inflation may have peaked was positive for stocks, as it means the Fed may be one step closer to halting rate hikes or moving to cuts, which would fuel stocks.

On Wednesday, the central bank will wrap up its December meeting and present its latest interest rate hike. Investors had largely expected an increase of 50 basis points – or half a percentage point – a smaller jump after four consecutive increases of 75 basis points. A basis point is equal to one hundredth of one percent.

Chairman Jerome Powell will also speak on Wednesday, giving further guidance on what’s to come from the Fed in 2023. In previous meetings this year, traders have been sensitive to Powell’s language, interpreting his tone as hawkish or dovish.

“The market obviously believes there’s going to be a pivot or a pause, that’s what we saw today,” Steve Grasso, CEO of Grasso Global, said on CNBC’s “Fast Money.” “If [Powell] put a wet blanket on that, the market will sell off.”

The Fed meeting is the last of the year. The next meeting of the central bank will be held from January 31 to February 1, 2023.


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