Stocks may move to the upside in early trading on Wednesday, regaining ground following the modestly lower close on Tuesday. The major index futures are currently pointing to a modestly higher open on Wall Street, with the S&P 500 futures up by 0.2 percent.
The upward momentum on Wall Street comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon, with the central bank widely expected to leave interest rates.
Traders are likely to pay close attention to the accompanying statement and the central bank’s projections for clues about the outlook for rates.
With the announcement just hours away, CME Group’s FedWatch Tool is currently indicating a 99.0 percent chance the Fed will leave rates unchanged.
Meanwhile, the likelihood of another rate hike in November has seemingly decreased in recent days. The FedWatch Tool currently indicates just a 28.9 percent chance of a quarter point rate increase.
Treasury yields are moving giving back ground ahead of the Fed announcement, with the yield on the benchmark ten-year note pulling back off its highest levels since 2007.
Buying interest may also be generated in reaction to a pullback by the price crude oil, as the recent surge in oil prices has led to renewed concerns about inflation.
After coming under pressure early in the session, stocks regained some ground over the course of the trading day on Tuesday but still closed modestly lower. The major averages all finished the day in the red, with the tech-heavy Nasdaq falling to its lowest closing level in almost a month.
The major averages remained stuck in negative territory going into the close. The Dow fell 106.57 points or 0.3 percent to 34,517.73, the Nasdaq dipped 32.05 points or 0.2 percent to 13,678.19 and the S&P 500 slipped 9.58 points or 0.2 percent to 4,443.95.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while China’s Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the U.K.’s FTSE 100 Index has advanced by 0.8 percent, the German DAX Index is up by 0.6 percent and the French CAC 40 Index is up by 0.5 percent.
In commodities trading, crude oil futures are sliding $0.71 to $90.49 a barrel after falling $0.28 to $91.20 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,952.70, down $1 compared to the previous session’s close of $1,953.70. On Tuesday, gold crept up $0.30.
On the currency front, the U.S. dollar is trading at 147.88 yen compared to the 147.86 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0693 compared to yesterday’s $1.0679.
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