Stock futures, oil rises ahead of Fed decision

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U.S. equity futures traded higher Wednesday morning ahead of a widely anticipated decision from the U.S. Federal Reserve on interest rate policy.

The major futures indexes suggest a gain of 0.8% when the opening bell rings.

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Oil prices were bouncing back Wednesday morning, after earlier falling more than $1 a barrel, as Russia’s invasion of Ukraine and ceasefire talks became the latest market triggers.

Benchmark U.S. crude gained $1.04 to hit $97.51 a barrel in electronic trading on the New York Mercantile Exchange.

Brent, the international pricing standard, added $1.84 to reach $101.75 per barrel.

Oil storage containers are seen in Los Angeles, California. REUTERS/Lucy Nicholson/Files (REUTERS/Lucy Nicholson/Files)

At a policy meeting later Wednesday, the Fed is expected to increase its key short-term rate by 0.25 percentage points. That would be the first increase since 2018, pulling it off its record low of nearly zero, and likely marking the start to a series of hikes.

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The Fed is trying to slow the economy enough to tamp down the high inflation sweeping the country while avoiding triggering a recession.

Inflation is already at its highest level in generations, and the most recent numbers don’t include the surge in oil prices after Russia invaded Ukraine. The move comes as central banks around the world are preparing to pull the plug on support poured into the global economy after the pandemic struck.

A shopper pushes her cart full of items down an aisle at Macy’s. (AP Photo/Darron Cummings, File)  (AP Photo/Darron Cummings, File / AP Newsroom)

A series of economic reports are due Wednesday morning.

The Commerce Department reports retail sales for February. Economists surveyed by Refinitiv anticipate consumer spending to jump 0.4% month-over-month, after a larger-than-expected gain of 3.8% in January. Excluding the automotive component, spending is seen as rising 0.9% in February, down from January’s 3.3% pop.

WHOLESALE PRICES SOAR 10% IN FEBRUARY, HIGHEST LEVEL ON RECORD

The government will also release import and export prices for February. Prices of imported goods likely rose 1.5% month-over-month, trailing January’s 2.0% increase. Watch for export prices to rise 1.6%.

The National Association of Homebuilders is out with its sentiment index for March. It’s anticipated to slip to 81, signaling that at least four out of five NAHB members regard business conditions as good.

In Europe, London’s FTSE added 1.1%, Germany’s DAX gained 2.6% and France’s CAC was up 2.7%,

Equity markets in Asia soared after China’s government tried to reassure jittery investors by promising support for its struggling real estate industry, internet companies and entrepreneurs after regulatory crackdowns. 

Japan’s benchmark Nikkei 225 jumped 1.6%, Hong Kong’s Hang Seng rose 9.1% and China’s Shanghai Composite gained 3.5%.

That has shares of Alibaba, JD.com and Didi Global jumping in remarket trading.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 33544.34 +599.10 +1.82%
SP500 S&P 500 4262.45 +89.34 +2.14%
I:COMP NASDAQ COMPOSITE INDEX 12948.621273 +367.40 +2.92%

On Wall Street, the S&P 500 gained 2.1% to 4,262.45, ending a three-day losing streak after a report showed inflation’s rapid acceleration paused at the wholesale level last month. The Dow Jones Industrial Average gained 1.8% to 33,544.34, and the Nasdaq rose 2.9% to 12,948.62. 

Renewed COVID-19 worries in some regions plus a lengthy list of other concerns have caused wild hour-to-hour swings in markets in recent weeks. 

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Investors are also watching the talks between Russia and Ukraine. Ukrainian presidential aide Ihor Zhovkva said discussions via video held by representatives of the two nations Tuesday were “more constructive,” noting that Russia has stopped airing its demands for Ukraine to surrender.

The Associated Press contributed to this report.

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