As investors wait for the Federal Reserve to cut interest rates tonight, markets are already reacting to news that the Fed may cut rates by more than previously expected. The Dow Futures dropped 50 points and the Nasdaq Futures lost 97 points. Some industry experts believe that the Fed will cut by .5% to 1% since the markets haven’t bounced back enough since the last rate cut. While the Fed has been keeping interest rates low to encourage spending, some industry experts believe that keeping rates low for too long will cause inflation to run high.
The stock market ended lower Tuesday (Aug. 19), as investors looked ahead to the Federal Reserve’s meeting this week and its statement on interest rates. The Fed will announce its decision on interest rates on Wednesday, as well as supply the market with its growth forecasts. Given that the Fed raised interest rates last month, many experts are predicting another rate hike will be announced this week.
U.S. stock futures surged Wednesday as investors awaited the Federal Reserve’s economic recovery results and earnings reports from major technology companies.
Futures on the broad S&P 500 index fluctuated between gains and losses, while futures on the Dow Jones Industrial Average fell 0.1%. Nasdaq-100 futures also fell 0.1%, indicating further weakness in technology stocks after they dragged down the broader indexes a day earlier.
Stocks are little changed this week, despite a better-than-expected start to the earnings season and signs of economic recovery. With the indices near record highs, investors expect corporate earnings to break through the high bar to support the high valuation of stocks. President Biden’s proposed tax increase and the outbreak of the coronavirus in India are also sources of concern.
The market is waiting to see if there will be another breakthrough in economic data, how the economic recovery will play out and how big the stimulus will be, he said.
Chief Investment Officer of HSBC Private Bank. We see a certain trade-off between the current increase in revenue, which is a positive factor, and the fear that an imminent tax increase will derail this.
Investors will also be watching closely for comments from the Fed chairman.
at the end of the central bank’s two-day monetary policy meeting at 2pm. ET. While the Fed is expected to leave interest rates and bond buying volume unchanged, fund managers are watching for a change in Powell’s tone that could signal a shift in monetary policy discussions in the coming months.
Markets expect him to take inflation risks off the table and relieve investors of those concerns, said Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe. The market also expects to be a little closer to setting a timetable for monetary tightening, which it obviously does not want to do. He has a lot to say without exaggerating.
The profits of big tech companies will also remain in the crosshairs as investors watch them deal with changing consumer habits as blockchain restrictions are eased.
will announce their results before the first bell.
The results are expected to be announced after the close of trading.
The reaction to the result was not exceptional. The market expected a significant improvement because it reflected what was happening in the economic data, Sels said. Therefore, earnings season comes down to whether there are any new announcements, such as on production and production costs.
Alphabet, the parent company of Google, is up more than 4% for the first bell. On Tuesday, the tech giant reported record first-quarter earnings, thanks to digital ad spending.
In the bond markets, yields on benchmark Treasury bills rose for the fourth consecutive day. The yield on 10-year bonds rose to 1.649% from 1.622% on Tuesday. Bond yields are rising in a context of falling prices.
According to analysts, the increase in the interest rate on government bonds has contributed to the rise in the interest rate on European government bonds. Investors are also increasingly confident that the European economy will rebound soon, reducing their incentive to hold the safest assets.
New York Stock Exchange, Monday.
The pace of growth in vaccines and the succession of news that vaccines are coping with change is giving European investors more confidence, said Peter Shaffrick, global macro strategist at RBC Capital Markets. Opening soon.
Outside Germany, the continental Stoxx Europe 600 index fell 0.1%.
Among individual stocks, Deutsche Bank rose more than 7% after it reported its highest quarterly profit in seven years. Food Delivery Service
also rose more than 7% after the company reported higher orders in the first quarter.
The major Asian markets closed higher. Japan’s Nikkei 225 index rose 0.2 percent and Hong Kong’s Hang Seng rose 0.5 percent. The Shanghai Composite Index rose 0.4%.
Email Will Horner at William.Horner@wsj.com.
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