Traders on the floor of the NYSE
Stock futures slipped on Wednesday as investors awaited the Federal Reserve’s meeting on Wednesday.
Futures for the Dow Jones industrial average fell 140 points, or 0.4%. S&P 500 futures and Nasdaq Composite futures were down 0.4% and 0.3%, respectively.
The Fed will announce at 2 p.m. ET how much it will raise interest rates in its latest effort to curb high inflation. Markets expect a 25 basis point or 0.25 percentage point hike from the central bank. On Tuesday, the Employment Cost Index, a measure of wage growth, showed compensation rose 1% in the fourth quarter, missing the Dow Jones estimate of 1.1%.
However, traders may be getting ahead of themselves in expecting a more dovish tone from the central bank, or looking for signs that a pause or even a pivot in hikes is imminent.
“Occupational tightening in 2022 has led to signs of easing inflation, but remains unacceptably high,” Lazard’s chief market strategist Ron Temple said in a note on Tuesday. “With a 25bps hike already discounted by markets, Powell’s job is to signal unequivocally the Fed’s commitment to reining in inflation.”
The Fed’s announcement will be followed by remarks from Chairman Jerome Powell.
Wall Street is coming off a strong session at the end of January. The Dow rose nearly 369 points on Tuesday, up 1.09%. The S&P 500 gained 1.46% to cap its best January performance since 2019. The tech-heavy Nasdaq composite rose 1.67%, posting its best January performance in 22 years.
The revenue season continues. Peloton and Meta Platforms are scheduled to report quarterly results on Wednesday.
Snap shares fell more than 15% after the social media company posted disappointing quarterly earnings. The company’s average revenue per user, a key metric for Snap, also came in below expectations. Meanwhile, AMD posted better-than-expected revenue and earnings, but warned of a 10% top-line decline in the first quarter.