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Stock futures are rising before the Fed decides

U.S. equities were on the rise, and the Federal Reserve was ready to raise the benchmark interest rate on Wednesday.

The future of the S&P 500 rose 0.3% on Wednesday. Nasdaq-100 technology-based contracts rose 0.2% and Dow Jones Industrial Average futures rose 0.2%. U.S. stock indexes rose on Tuesday.

Fed officials said they could raise interest rates by half a percentage point and approve plans to start reducing the central bank’s $ 9 trillion asset portfolio when the monetary policy decision is published on ET at 2 p.m. The Fed raised rates by a quarter of a percentage point in March, ranging from 0.25% to 0.5%.

The moves are part of a double-barreled effort to slow the economy and ease inflation, which is four decades high. At the same time, investors are concerned that the Fed’s aggressive interest rate hike could cause an economic downturn, and that future rate cuts will be necessary. Investors will consider comments from Fed Chairman Jerome Powell on Wednesday evening to find out how much the central bank can raise interest rates this year.

“This is a question that the markets are facing. Where is the Fed going? Is this range of rate hikes really reaching 5% or 6%, which will end with a cooling of the economy?” Said Carsten Brzeski, ING Groep.‘s

World Head of Macro Research.

Investors were also controlling whether inflation was eating up profits or weighing on consumer spending. In pre-market trading, Airbnb’s shares rose more than 4% after the company said it expects its first net profit for the full year this year. Starbucks shares rose more than 6% after the coffee chain said earnings and sales were up in the last quarter.

Shares of Lyft fell more than 25 percent from pre-marketing, the travel hailing company said it would invest in the current quarter to ensure proper driver supply and grow its ride-on platform as investors were horrified by expenses weighing on operating profits.

Traders were working on the floor of the New York Stock Exchange on Monday.


Photo:

Spencer Platt / Getty Images

In bond markets, the benchmark 10-year Treasury bill yield rose to 2.970% from 2.957% on Tuesday.

In commodities, Brent crude oil futures rose 3.2% to $ 108.32 a barrel. Concerns about Russia’s reduced energy supply as a result of the war against Ukraine have kept prices high in recent months. The European Union has proposed a six-month ban on imports of Russian crude oil and a ban on refined petroleum products by the end of the year, European Commission President Ursula von der Leyen said on Wednesday.

Abroad, the Stoxx Europe 600 pan-continental fell 0.6%. Hang Seng in Hong Kong fell by 1.1% and Kospi in South Korea by 0.1%. The mainland China and Japan markets were closed for the holidays.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

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Stock futures are rising before the Fed decides

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