Stock futures rise under pressure from traders for Fed’s decision

US stock futures rose higher on Wednesday morning, with investors waiting for the Federal Reserve’s latest monetary policy decision against a backdrop of high inflation and the still-tight US labor market.

Contracts rose on each of the S&P 500, Dow and Nasdaq in pre-market trading. Treasury yields held steady, and the benchmark 10-year yield settled below 3%, or near its highest level since the end of 2018.

Investors await the Federal Reserve’s monetary policy statement and Chair Jerome Powell’s press conference later Wednesday afternoon. The central bank is widely expected to raise interest rates by 50 basis points for the first time since 2000. Such a hike would double the Fed’s 25 basis-point hike in mid-March, the first rate hike since. 2018 will bring the target range for the federal funds rate between 0.75% and 1.00%, compared to the current range between 0.25% and 0.50%.

Expectations of this supersized rate hike have been raging among market participants for weeks now, especially given the remarks from prominent Federal Reserve officials to support such a move. Powell said during a public appearance with the International Monetary Fund earlier this month that he believed there would be a “reasonable … to move a little bit more quickly” on a rate hike, and 50 for May. Base points were “on the table”. , And the Fed is also expected to use the May meeting to announce the start of a quantitative tightening, or rolling assets, from the central bank’s $9 trillion balance sheet.

The prospect of higher interest rates has fueled volatility in equity markets, which in the past two years had become accustomed to ultra-low interest rates and generally easy-money monetary policies. At the same time, however, many pundits have suggested that the Fed has allowed its pandemic-era supportive policies to last too long, causing inflation to hit the fastest rates since the 1980s. And with US GDP growth turning negative in the first three months of the year, a question remains whether the Fed will now be able to tighten policies without plunging the economy into a deep recession.

“Since the market has set a price hike of 50 basis points at the Federal Reserve’s May meeting, the focus will immediately shift to how many half-point hikes the Fed expects on the 2022 balance,” said Danielle DeMartino Booth. , CEO and chief strategist at Quill Intelligence wrote in an email Tuesday. ,The Fed will shock the markets if it fails to deliver a more aggressive policy through Wednesday’s increase of 50 basis points.

“The Federal Reserve’s credibility is on the line given the jump in inflation, which has proven to be anything but momentary,” Booth said. “Interest rates are too low and markets have become accustomed to virtually unlimited liquidity from the Fed’s bond purchases. Powell’s greatest folly would be to insist that the economy is too strong, with overwhelming evidence that it is slow and booming. slower than.”

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7:39 a.m. ET: Uber posts better-than-expected quarterly results, guidance

Uber on Wednesday morning posted estimated first-quarter results and current-quarter guidance, with the ride-hailing company indicating it was working through a driver crunch while maintaining solid profitability .

Revenue more than doubled to $6.9 billion during the first quarter, according to data compiled by Bloomberg, up from estimates of $6.1 billion. Adjusted EBITDA increased to $168 million, well ahead of the expected $135 million. Trips during the first quarter grew 18% over last year to 17.1 billion, underscoring the ongoing recovery in rider demand.

For the current quarter, Uber said it sees bookings gross between $28.5 million and $29.5 billion and adjusted EBITDA between $240 million and $270 million.

Uber shares fell in early trading following the results. Earlier during the overnight session, Uber’s shares slipped in sympathy with Lyft’s stock, which slipped after the ride-hailing company offered current-quarter revenue and profit forecasts that fell short of analyst expectations. was reduced from

According to a statement, Uber was previously scheduled to report its quarterly results after the market closes on Wednesday, but following Lyft’s report, “a more timely update on the company’s performance and guidance before the market opens.” Rescheduled to provide.”

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7:29 am ET Wednesday: Stock futures gains

Here the market was trading before the opening bell

  • S&P 500 Futures (n = f,: +16.75 marks (+0.4%) to 4,186.00

  • Dow Futures (ym = f,: +122 marks (+0.37%) to 33,155.00

  • Nasdaq Futures (NQ = F, +44.75 points (+0.34%) to 13,132.25

  • raw (CL = F,: +$3.88 (+3.79%) to $106.29 per barrel

  • Sleep (gc = f,:-$4.30 (-0.23%) to $1,866.30 per ounce

  • 10 year treasury (^tnx,: +0.4 bps yield 2.962%

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6:01 a.m. ET Tuesday: Stock futures open mixed

Here’s what was being traded in the markets on Tuesday evening:

  • S&P 500 Futures (n = f,: +1.5 points (+0.04%) to 4,170.75

  • Dow Futures (ym = f,: -2 marks (-0.01%) to 33,031.00

  • Nasdaq Futures (NQ = F, +22.75 marks (+0.17%) to 13,110.25

NEW YORK, NEW YORK – APRIL 28: Traders work on the floor of the New York Stock Exchange (NYSE) on April 28, 2022 in New York City. The Dow Jones Industrial Average was up in morning trading as the market was reeling under volatility over inflation concerns and the war in Ukraine. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. follow him on twitter,

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