Stock-index futures struggled for direction Wednesday as investors await a Federal Reserve decision—as well as clues to future monetary policy moves—and continue to wade through a flood of quarterly corporate results.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YMZ19, -0.01% were off 4 points at 27,038, while S&P 500 futures ESZ19, -0.01% edged down by 0.45 point to trade at 3,035.25. Nasdaq-100 futures NQZ19, +0.03% were up 1.5 points at 8,056.75. Moves all three index futures were less than 0.1%.
The S&P 500 SPX, -0.08% notched an all-time intraday high Tuesday morning, but ended slightly lower after equities lost steam. The large-cap index, which posted a record close on Monday, lost 2.53 points Tuesday, or 0.1%, to end at 3,036.89. The Dow DJIA, -0.07% gave up 19.30 points, or 0.1%, to finish at 27,071.42, while the Nasdaq Composite COMP, -0.59% shed 49.13 points, or 0.6%, closing at 8,276.85.
What’s driving the market?
The Federal Reserve will be in the spotlight Wednesday. Policy makers are widely, but not universally, expected to lower the fed-funds rate by a quarter point, the third cut this year. The key question surrounds what signals the central bank and Chairman Jerome Powell will send regarding prospects for additional cuts. Traders have scaled back bets for further reductions later this year and in 2020.
With a quarter-point rate cut reflected up to 95% in asset prices, there “ is only a little upside potential left to be explored on the interest rate front,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.
That means the Fed statement “is what matters the most to investors at today’s decision announcement. The sweet blend of better-than-expected third-quarter earnings and the progress in trade negotiations with China suggests an increased likelihood of a hawkish Fed statement,” she said.
Indeed, some investors contend a signal the Fed is moving to the sidelines could rob equities of a source of support that’s helped them to rally back to record territory. The Fed is set to announce its policy decision at 2 p.m. Eastern, followed by Powell’s news conference at 2:30 p.m.
That said, data due ahead of the decision could influence how investors “hear” Powell’s message she said. An estimate of third-quarter gross domestic product is due at 8:30 a.m. Eastern, with economists surveyed by MarketWatch looking, on average, for annualized growth of 1.6%, slowing from a 2% pace in the previous three months.
Other data on tap include ADP’s estimate of October private-sector jobs growth at 8:15 a.m. Eastern.
What companies are in focus?
Investors continue to wade through the busiest week of earnings season. Corporate heavyweights reporting ahead of the opening bell include General Electric Co. GE, +0.00%, Yum Brands YUM, +0.19% and Royal Caribbean Cruises Ltd. RCL, +0.95%, while Apple Inc. AAPL, -2.31% results are due after the bell, along with earnings from Facebook Inc. FB, -0.05% and ride-hailing company Lyft Inc. LYFT, -1.67%.
Among those, shares of General Electric were up nearly 7% in premarket action after it narrowed its third-quarter loss and reported flat revenue.
Shares of Advanced Micro Devices Inc. AMD, -1.96% were off 2.2% in premarket action after the chip maker delivered third-quarter earnings late Tuesday that were in line with estimates and said it expected about the same for the current quarter.
In other corporate news, Fiat Chrysler Automobiles NV FCAU, +7.56% FCA, +9.02% and Peugeot maker PSA Group of France UG, +6.18% confirmed they are in talks over a potential combination, which would create a $46 billion trans-Atlantic auto giant that would rank as the world’s fourth-largest by volume.
Anixter International Inc. AXE, +0.41% said Wednesday it has agreed to be bought by an affiliate of private-equity frim Clayton, Dubilier & Rice in a cash deal valued at $3.8 billion, including debt. CD&R would pay $81 for each share of the network and electrical products company, a 13% premium to Tuesday’s closing price of $71.40. Shares were up 4% in premarket trade.