May 18, 2024

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Stock futures drop ahead of major Fed policy decision

Stock futures drop ahead of major Fed policy decision

Stock futures fell on Wednesday as investors braced for the Federal Reserve’s latest interest decision at the conclusion of its policy meeting.

Futures linked to the Dow Jones Industrial Average were down 76 points, or 0.23%. S&P 500 and Nasdaq 100 futures traded flat.

Stock futures moved towards session lows after release Better than expected October payroll data.

The Fed is widely expected to announce a 0.75 percentage point It is the fourth consecutive increase of this size as it struggles with high inflation rates. Investors are also looking for a sign that the central bank is ready to slow down its plan to raise interest rates in December.

Comments from the Federal Reserve and Fed Chair Jerome Powell will play a key role in deciphering where stocks are going in the coming months and whether markets will start a new bull run.

“The continuation of the year-end rally is contingent on the Fed’s presentation of the pivotal narrative,” Barclays’ Emmanuel Kao wrote in a note to clients on Wednesday. “Peak hawks may fuel more fear of fear, but not to be confused with enthusiasm, as the central bank continues to tread a fine line. Interest rate cuts have been a prerequisite for stocks to start a new bull market in the past — we’re not there yet.”

The central bank’s decision will come after the release of mixed economic data on Tuesday.

The ISM Manufacturing Index showed the share of companies reporting expansion in October Comes a little ahead of expectationswhile the JOLTS report conveyed a strong labor market despite the strong Fed tightening.

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“It’s not a huge number for the Fed, it’s still a tight labor market,” Victoria Green, chief investment officer at J Squared Private Wealth, told CNBC’s “Closing Bell: Overtime” on Thursday. “So I think they’re still between a rock and a hard place. They’re going to have to walk a long way. Nobody likes it. Everyone wants them to stop, but it’s like a car accident in slow motion. They just can’t stop for a walk.”

In other economic news, mortgage application data for Last week was flat despite a slight drop in prices.

Earning season continues with Powerful results from CVS Health. Advanced Micro Devices Rose though the top and bottom line miss.