Futures edge lower on caution ahead of Fed rate decision
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures down: Dow 0.17%, S&P 0.24%, Nasdaq 0.43%
March 22 (Reuters) -U.S. stock index futures fell on Wednesday in the run-up to a crucial interest rate decision by the Federal Reserve, which is widely expected to raise rates by a quarter percentage point despite the recent turmoil in the banking sector.
The Fed's two-day monetary policy meeting will end at 2 p.m. ET (1800 GMT) on Wednesday. The expected rate hike of 25 basis points is a turnaround from the steep 50 basis points rate rise anticipated before the recent banking turmoil, triggered by the recent collapse of two regional banks.
Markets will also be watching out for a news conference by Fed Chair Jerome Powell following the interest rate decision, looking for cues about the central bank's future path in his commentary.
"There will be considerable psychology at work, as a pause at this stage could inflame worries by being taken to indicate that policymakers are rattled," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"Instead, they (the Fed) may prefer to shore up confidence by keeping to a pre-set path for now, particularly given that stability has returned."
Wall Street's main indexes notched gains for the past two straight sessions, after the rescue of Credit Suisse CS.N as well as measures by central banks to boost liquidity helped soothe some worries about risks to other banks.
However, a scramble by troubled regional U.S. lender First Republic Bank FRC.N to secure a capital infusion has kept alive some fears about the banking sector.
Shares of First Republic edged 3.0% higher in premarket trade, with a Bloomberg News report on Tuesday stating the bank's rescue could rely on backing from the U.S. government to facilitate a deal.
Shares of its peers PacWest Bancorp PACW.O and Western Alliance Bancorp WAL.N inched about 1% higher in choppy trading.
U.S. Treasury yields inched lower amid the cautious mood, with that on the two-year note last at 4.13%.
At 5:00 a.m. ET, Dow e-minis 1YMcv1 were down 57 points, or 0.17%, S&P 500 e-minis EScv1 were down 9.5 points, or 0.24%, and Nasdaq 100 e-minis NQcv1 were down 54.75 points, or 0.43%.
Among other stocks, shares of Nike Inc NKE.N fell 1.6% in premarket trade after the sports apparel maker raised its full-year revenue outlook on Tuesday but warned of margin pressures.
Shares of GameStop Corp GME.N jumped 38.9% after the company posted a surprise profit for the fourth quarter, helped by lower costs and job cuts.
Reporting by Amruta Khandekar; Editing by Nivedita Bhattacharjee
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
