U.S. stock futures gained ahead of the Federal Reserve’s announcement that is expected to provide clarity on coming interest-rate rises—the prospect of which spooked markets this week.
Futures for the S&P 500 added 1.1% Wednesday. The broad index fell Tuesday and has declined in five of the past six trading days. Contracts for the tech-focused Nasdaq-100 rose 1.7% and futures for the Dow Jones Industrial Average gained 0.8% Wednesday.
Stocks have been rocked in recent days by expectations that the Fed will embark on a series of rate increases this year to temper heightened inflation. The prospect of a shrinking balance sheet and higher rates has prompted some to sell risky assets, including shares of technology companies that promise future returns, and cryptocurrencies. Investors are also monitoring rising tensions between Russia and Ukraine that have drawn the focus of NATO allies.
Economists expect the Fed to confirm expectations that it will start raising rates in March when it releases its statement at 2 p.m. ET.
“Today the focus is going to be on the Fed,” said Luca Paolini, chief strategist at Pictet Asset Management. “It’s more about the tone of the press conference. People may have an expectation that given the market turmoil and the geopolitical tensions the Fed may tone down its rhetoric.”
On Wednesday, earnings are due ahead of the market open from big-name companies includingAT&T,Abbott LaboratoriesandBoeing.TeslaandIntelare slated to post results after markets close.
In premarket trading, shares of Microsoft rose 3% after the software giant said its earnings continued to grow as its cloud-services business stayed strong. The report was a bright spot for markets, Mr. Paolini said.
In bond markets, the yield on the benchmark 10-year Treasury note crept up to 1.785% Wednesday from 1.784% Tuesday. Yields move inversely to prices.
Overseas, the pan-continental Stoxx Europe 600 jumped 1.6%, while major stock indexes in Asia closed mixed. China’s Shanghai Composite and Hong Kong’s Hang Seng added 0.7% and 0.2%, respectively. Japan’s Nikkei 225 and South Korea’s Kospi each declined 0.4%.
In cryptocurrencies, bitcoin’s dollar value rose 3% from its 5 p.m. ET level Tuesday to $37,742.54.
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