U.S. Stocks May Lack Direction Ahead Of Fed Announcement

Following the rebound seen over the course of the previous session, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat ...

RTT Staff Writer•Thursday, March 21, 2024•2 min read

Following the rebound seen over the course of the previous session, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures down by less than a tenth of a percent.

Traders may be reluctant to make significant moves ahead of the Federal Reserve’s highly anticipated monetary policy announcement this afternoon.

While the Fed is widely expected to leave interest rates unchanged, traders will look to the accompanying statement and economic projections for clues about the outlook for rates.

CME Group’s FedWatch Tool is indicating a 99.0 percent chance the Fed will leave rates unchanged today and a 90.7 percent chance rates will remains unchanged in May.

The outlook for June is more mixed, however, with the FedWatch Tool indicating a 55.0 percent chance of a quarter point rate cut and a 39.7 percent chance of an extended pause.

Nonetheless, the tech sector may receive a boost from a surge by shares of Intel (INTC), with the semiconductor giant jumping by 2.4 percent in pre-market trading.

The advance by Intel comes after the company was awarded up to $8.5 billion in direct funding from the Biden administration for commercial semiconductor projects under the CHIPS and Science Act.

After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Tuesday. The major averages climbed well off their worst levels of the day and into positive territory.

The major averages reached new highs for the session going into the close of trading. The Dow advanced 320.33 points or 0.8 percent to 39,110.76, the S&P 500 climbed 29.09 points or 0.6 percent to 5,178.51 and the Nasdaq rose 63.34 points or 0.4 percent to 16,166.79.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index climbed by 0.6 percent, while South Korea’s Kospi jumped by 1.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.2 percent, the U.K.’s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.7 percent.

In commodities trading, crude oil futures are tumbling $1.34 to $82.13 a barrel after climbing $0.75 to $83.47 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,157, down $2.70 compared to the previous session’s close of $2.159.70. On Tuesday, gold slipped $4.60.

On the currency front, the U.S. dollar is trading at 151.75 yen compared to the 150.86 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0839 compared to yesterday’s $1.0866.