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U.S. stock futures traded mixed on Wednesday, with signs that technology stocks will come under pressure again as markets await a decision by the Federal Open Market Committee later. Retail sales and other data is also ahead.
How are stock-index futures trading?
-
S&P 500 futures
ES00,
-0.09%
were flat at 4,626 -
Dow Jones Industrial Average futures
YM00,
+0.00%
rose less than 0.1% to 35,470 -
Nasdaq-100 futures
NQ00,
-0.34%
dropped 0.3% to 15,874
All three benchmarks saw a second straight day of losses on Tuesday, with the Dow Jones Industrial Average
DJIA,
falling 106.77 points, or 0.3%, to close at 35,544.18. The S&P 500
SPX,
slipped 0.8% to finish at 4,634.09. The Nasdaq Composite
COMP,
dropped 1.1%, to end at 15,237.64.
What’s driving the markets?
Stocks have seen a tough start to the week as investors brace for the outcome of the Fed meeting, due at 2 p.m. Eastern Time, with a news conference to follow at 2:30 p.m. by Fed Chairman Jerome Powell.
The central bank is expected to announce a faster tapering pace of its bond purchases to combat higher inflation, and with that faster taper will come expectations of higher interest rates. The latter has put particular pressure on growth-focused technology stocks, which are more sensitive to interest rate changes.
Read: 5 things to watch for when the Federal Reserve announces its policy decision Wednesday
The Nasdaq has lost around 2% this month so far, lagging a 3% rise for the Dow industrials and a 1.5% gain for the S&P 500.
“Most interesting will be any signaling on where the Fed sees core PCE inflation next year and in 2023 and the degree to which Fed members have raised their policy rate forecasts relative to what the market is predicting, which is for between two and three rate hikes through the end of next year,” said Peter Garnry, head of equity strategy at Saxo Bank, in a note to clients.
Investors will also be on the lookout for any Fed comments on the effect of the fast-spreading omicron variant on the U.S. economy. The death toll in the U.S. has now surpassed 800,000 from COVID-19, and a study from the Centers for Disease Control and Prevention has reportedly warned of a surge in cases, peaking in mid-January that could overwhelm undervaccinated communities.
That’s as a small study from Hong Kong showed that two doses of one of China’s main vaccines from Sinovac, did not neutralize the omicron variant. The vaccine is also widely used across many developing nations.
Ahead of the Fed meeting, investors will get November retail sales data and import prices, along with the Empire State manufacturing index for December, all at 8:30 a.m. Eastern. The National Association of Home Builders index for December, along with business inventories for October are scheduled for release at 10 a.m. Eastern.
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Read More: U.S. stock futures trade mixed, with tech pointing lower again as Fed decision looms