After moving sharply higher over the two previous sessions, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open, with the Dow futures down by just 1 point.
Traders may be reluctant to make significant moves ahead of the Federal Reserve’s highly anticipated monetary policy announcement this afternoon.
With the announcement just hours away, CME Group’s FedWatch Tool is currently indicating a 90.8 percent chance the Fed will raise interest rates by 25 basis points.
Recent troubles in the banking sector led to some speculation the Fed might leave rates unchanged, but large-scale efforts to address the turmoil have largely negated that sentiment.
Subsequently, the focus is likely to be on the Fed’s accompanying statement as well as its latest projections for the economy, inflation and interest rates.
Stocks moved sharply higher over the course of the trading session on Tuesday, extending the upward move seen during trading on Monday. The major averages all showed strong moves to the upside, with the tech-heavy Nasdaq reaching its best closing level in over a month.
The major averages pulled back off their best levels going into the close but held on to strong gains. The Dow jumped 316.02 points or 1.0 percent to 32,560.60, the Nasdaq surged 184.57 points or 1.6 percent to 11,860.11 and the S&P 500 shot up 51.30 points or 1.3 percent at 4,002.87.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index spiked by 1.9 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index is up by 0.5 percent, the French CAC 40 Index is up by 0.3 percent and the U.K.’s FTSE 100 Index is up by 0.1 percent.
In commodities trading, crude oil futures are slipping $0.21 to $69.46 a barrel after surging $1.85 to $69.67 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,944.50, up $3.40 compared to the previous session’s close of $1,941.10. On Tuesday, gold plunged $41.70.
On the currency front, the U.S. dollar is trading at 132.88 yen compared to the 132.51 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0781 compared to yesterday’s $1.0768.
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