Stock futures are stable ahead of Fed decision

Traders work on the floor of the New York Stock Exchange (NYSE), October 12, 2021.

Brendan McDermid | Reuters

U.S. equity futures were little changed on Tuesday night as investors awaited a decision from the Federal Reserve on its reduction schedule.

Futures contracts on the Dow Jones Industrial Average fell 18 points, or 0.05%. S&P 500 and Nasdaq 100 futures fell 0.05% and 0.06%, respectively.

Lyft jumped 10.3% after-hours trading on better-than-expected third quarter results. Zillow fell 8% after announcing it was shutting down its home buying and flipping business. Shares of Bed Bath & Beyond rose following a partnership announcement with Kroger, but the 80% rise that followed was likely fueled by a short squeeze.

In regular trading, the Dow Jones rose 138.79 points to 36,052.63. The S&P 500 gained 0.3% and the Nasdaq Composite gained 0.3%. The top three averages closed at record highs for the third consecutive session. Russell 2000 small cap edged up and closed at an all-time high.

Investors are focusing on the Federal Reserve, which is expected to announce the end of its bond buying program on Wednesday after its two-day meeting. They will also be listening for clues as to when the central bank plans to raise interest rates.

Still, stocks rose on Tuesday as companies continued to publish strong earnings reports. Of the S&P 500 companies that have released results so far this season, 83% have beaten consensus expectations, according to FactSet. This despite continued supply chain disruptions, labor issues, commodity inflation, central bank policy and the risk of Covid.

“Stocks are like the Energizer bunny because they continue to climb to new highs and show no signs of fatigue,” said Ryan Detrick, chief market strategist for LPL Financial. “We understand all the concerns, but the bottom line is that earnings continue to be much better than expected and help justify stocks at current levels.”

These highs make a potential end-of-year rally more likely for investors.

“The primary market trend appears to be higher,” said Keith Lerner, co-director of investments at Truist. “In the eight periods since 1950 where stocks rose more than 20% through October, as it did this year, the S&P 500 made additional year-end gains 100% of the time with an average gain of 6.2%. “

Weekly mortgage applications and ADP salary data are also expected to be released.

CVS and Marriott are expected to release their results before the bell Wednesday. MGM Resorts, Etsy and Electronic Arts will report after the bell.

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