Stock futures rose slightly on Wednesday morning as traders anticipate the Federal Reserve’s upcoming interest rate hike announcement.
Dow Jones Industrial Average futures were up 42 points, or 0.14%. S&P 500 and Nasdaq 100 futures were up 0.15% and 0.13%, respectively.
Stocks fell Tuesday on the first day of the Federal Open Market Committee meeting. The Dow Jones Industrial Average lost 313.45 points, or 1.01%. The S&P 500 and the Nasdaq Composite fell 1.13% and 0.95% respectively.
Yields also rose on Tuesday. The yield on the 2-year US Treasury note rose to 3.99%, its highest level since 2007. The yield on the 10-year Treasury bond briefly touched 3.6%, the most since 2011.
Investors expect the central bank to deliver its third straight 0.75 percentage point rate hike on Wednesday to rein in high inflation. A higher-than-expected consumer price index reading in August and hawkish comments on rate hikes from Fed leaders have weighed on stocks, and more pressure is likely ahead as the central bank continues to fight inflation.
“We’ll never really know if the stock market’s lows are in for the year without successfully testing the June lows,” John Lynch, chief investment officer at Comerica Wealth Management, said in a Tuesday note. “Certainly, the recent technical weakness in equity prices must now be dealt with by the resolve of policy makers in their fight against inflation.”
He added that the third-quarter earnings season may also add headwinds for share prices if they show further erosion of margins for US companies.
Investors will also be watching earnings from Lennar, KB Homes, General Mills and Steelcase on Wednesday. Existing Home Sales will also be released on Wednesday morning.