U.S. stock futures climb ahead of Fed meeting; trade optimism returns

U.S. stock futures indicated a higher start for Wall Street when the market opens later on Wednesday, with fresh trade-deal optimism helping to lift sentiment as investors await the outcome of a key policy announcement from the Federal Reserve.

Dow Jones Industrial Average futures YMH9, +0.47% rose 128 points, or 0.6%, to 23,745, while S&P 500 futures ESH9, +0.55%  rose 16 points, or 0.6%, to 2,554. Nasdaq-100 futures NQH9, +0.48% climbed 37 points, or 0.6%, to 6,520.50.

On Tuesday, the Dow Jones Industrial Average DJIA, +0.35% finished up 0.4% to 23,675.64, while the S&P 500 index SPX, +0.01% rose less than a point to close at 2,546.16. The Nasdaq Composite Index COMP, +0.45% climbed 0.5% to 6,783.91.

All three benchmarks closed off their early morning highs. The Dow climbed as high as 335 points.

Optimism on U.S.-China trade talks returned to the market after U.S. Treasury Secretary Steven Mnuchin said the U.S. and China will meet in January to broker a trade-war truce, in an interview with Bloomberg News on Tuesday.

Mnuchin also said that he blamed market volatility on the effect of the financial-crisis-era Volcker rule and high-frequency trading, which he said combined to sap liquidity in the market.

Traders are hopeful that the Federal Reserve will help calm what has been a tumultuous atmosphere for investors in the past several weeks. The central bank’s interest-rate setting committee, the FOMC, will conclude its two-day meeting Wednesday and announce a decision on whether to raise interest rates Wednesday at 2 p.m.

CME Group data, gauging Federal-funds futures, indicate an 83.8% likelihood that the Fed will raise rates at least 0.25% Wednesday, even as prominent voices, including the Wall Street Journal’s editorial page, called for the Fed to pause amid signs of slowing economic growth. President Donald Trump took to Twitter again Tuesday morning to promote the Journal editorial and push for the Fed to halt.

But if the Fed does hike, investors hope the Fed will make dovish noises on future policy intentions. Investors will be watching closely for the Fed’s statement it issues to accompany the interest-rate decision, as well as a news conference at 2:30 Wednesday, where Federal Reserve Chair Jerome Powell will discuss future interest rate increases.

Optimism didn’t exactly extend to Asian markets, which were a mixed bag with Japan’s Nikkei NIK, -0.60%l shedding 1% and China’s Shanghai Composite Index SHCOMP, -1.05% off 0.4%.

Crude prices CLH9, +0.15%CLH9, +0.15% were modestly higher, while the ICE Dollar Index DXY, -0.35% dipped and gold GCZ8, +0.13%GCZ8, +0.13%ADOW, +0.37% was flat.

Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.

Source: Read Full Article