MW: U.S. stocks eye gains as interest-rate hike looms
U.S. stock futures on Wednesday pointed to a higher open, as strategists said the market could cheer the interest-rate hike that’s widely expected this afternoon.
S&P 500 futures ESZ5, +0.46% rose 6.65 points, or 0.3%, to 2,043.75, while Dow Jones Industrial Averague futures YMZ5, +0.50% gained 58 points, or 0.3%, to 17,528. Nasdaq 100 futures NQZ5, +0.48% tacked on 16.50 points, or 0.4%, to 4,617.50.
“Fed Chair Yellen and New York Fed President Dudley have indicated rate liftoff should be seen as a sign of confidence in the economy, so an increase as expected should help to support stocks and corporate earnings expectations through the end of the year and on into 2016,” said Colin Cieszynski, chief market strategist at CMC Markets, in a note.
“A decision not to raise rates would come as a big surprise and could send stocks plunging again as we saw when the Fed held off in September,” Cieszynski added. “Rather than the celebrations of the past, a dovish Fed would likely be greeted by a chorus of what’s wrong?”
The Federal Reserve’s rate decision is due at 2 p.m. Eastern Time, followed by a news conference at 2:30 p.m. featuring Yellen. The CME Group’s FedWatch tool has put the chance of a hike at 81%.
Read more: How stocks and other assets do surprisingly well when rates rise
See also: How to tell if the Fed statement is dovish or just cautious
On Tuesday, the S&P 500 SPX, +1.06% gained 1.1% while the Dow DJIA, +0.90% rose 0.9%, or 156 points, as each benchmark advanced for a second day in a row — helped by oil prices rebounding.
Individual movers: FedEx Corp. FDX, +0.70% could see active trading as the shipping giant is slated to post quarterly results before the open.
Oracle Corp. ORCL, +1.49% is among the companies due to report earnings after the market’s close.
Amgen Inc. AMGN, +2.85% could see gains after the biotech announced a dividend hike late Tuesday, while Dover Corp. DOV, +0.10% could drop after the maker of industrial equipment cut its profit outlook.
Other markets: Crude-oil futures CLF6, -0.78% fell early Wednesday after a two-day runup, while European stocks SXXP, +0.55% gained. Asian stocks closed largely higher, with China’s Shanghai Composite SHCOMP, +0.17% inching up and Japan’s Nikkei NIK, +2.61% rising sharply. A key dollar index DXY, +0.11% gained, and gold futures GCF6, +0.24% also advanced.
Other economic news: A sizable dose of U.S. economic data is due before the Fed decision, starting with a report on November housing starts at 8:30 a.m. Economists polled by MarketWatch expect a reading of 1.14 million.
A November report for industrial production is slated to hit at 9:15 a.m., with economists predicting a decline of 0.3%. That should be followed by a December reading for a manufacturing index at 9:45 a.m.
