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Stock futures are steady ahead of a key Fed decision

Stock futures are steady ahead of a key Fed decision

Focus on tomorrow's Fed messages, not 75 bps hike, says Wells Fargo's Michael Schumacher

Stock futures were little changed on Tuesday night as investors braced for the Federal Reserve’s latest policy decision at the end of Wednesday’s meeting.

Futures tied to the Dow Jones Industrial Average were 10 points lower. S&P 500 futures and Nasdaq 100 futures were flat.

In regular trading, major stock indexes ended the day lower after September job openings showed a resilient labor market. The Dow fell about 79 points, or 0.2%. The S&P 500 lost 0.41% and the Nasdaq Composite lost 0.89%.

Investors are awaiting a key policy decision from the Fed, which is expected to announce it will raise interest rates by three quarters of a point, its fourth consecutive increase of that size, in its ongoing efforts to combat high inflation. Market participants, however, are looking for a signal that the central bank is ready to slow the pace of its plan to raise interest rates in December.

“We’re looking for some guidance… 75 [basis points] is expected, it will hit, but what will be the direction forward? It’s all about what’s coming and the pace of the next increases,” said Victoria Greene, chief investment officer at G Squared Private Wealth. She spoke on CNBC’s “Closing Bell: Overtime.”

On Tuesday, the ISM manufacturing index shows the share of companies that reported expansion in October it was lower by 0.9 percentage points rather than September. The JOLTS report showed 1.9 job vacancies for every available worker.

“It’s just not a great number for the Fed, it’s still a tight labor market,” Greene said. “So I think they’re still between a rock and a hard place. They’re going to have to hike. Nobody likes that. Everyone wants to stop, but it’s like a car accident in slow motion. You just can’t stop hiking.”

In addition to the Fed’s policy decision, investors will also be watching mortgage application data and the ADP jobs report, which will be released on Wednesday morning.

Earnings season will resume on Wednesday with healthcare companies including CVS Health, Humana and GlaxoSmithKline before the bell. Paramount and Yum! Brands are also on deck.



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