Stock futures are slightly lower on Wednesday ahead of the Federal Reserve’s latest policy decision on interest rates. After a rough month, Wall Street is watching closely for any updates. The Dow Jones Industrial Average futures and S&P 500 futures are both down 0.2%, while Nasdaq 100 futures have also shed about 0.2%.
In after-hours trading, Yum China Holdings, a restaurant operator, experienced a 9.2% drop after missing revenue estimates for the third quarter. Match Group, the parent company of Tinder, also saw a 6.9% decrease in shares due to disappointing revenue guidance for the fourth quarter. However, Advanced Micro Devices showed some promise with its earnings and revenue, surpassing expectations.
Market movements coincide with the anticipation of the Fed’s policy announcement. Most analysts predict that interest rates will remain steady, with a more than 99% probability based on fed funds futures pricing. The decision will be released at 2 p.m. ET, followed by a news conference with Chair Jerome Powell at 2:30 p.m. ET.
Peter Boockvar, the CIO of Bleakley Advisory Group, expects a “boring” statement from the Fed but emphasizes that quantitative tightening continues to tighten financial conditions behind the scenes.
Although stocks have rallied this week, recovering from a challenging October, the Dow and S&P 500 both closed the month lower, marking their first three-month losing streak since March 2020. The Nasdaq Composite also declined in October, by 2.8%.
Investors are also monitoring bond yields, as the benchmark 10-year U.S. Treasury yield crossed the crucial 5% mark for the first time since 2007 earlier this month, sparking concerns about the impact of sustained higher interest rates.
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