Market Snapshot: Wall Street aims to break a string of losses as some Evergrande worries ease and Fed meeting looms

U.S. stock index futures climbed on Wednesday, after four days of losses and ahead of a policy statement by the Federal Reserve and after distressed Chinese property giant said it would meet its interest payment commitments on Thursday.

How are stock-index futures trading?
  • Dow Jones Industrial Average futures
    YM00,
    +0.59%

    climbed 194 points, or 0.6%, to 33,992

  • S&P 500 index futures
    ES00,
    +0.54%

    rose 24 points, or 0.6%, to 4,367

  • Nasdaq-100 index futures
    NQ00,
    +0.28%

    were up 56 points, or 0.3%, to 15,074

On Tuesday, the Dow Jones Industrial Average
DJIA,
-0.15%

fell 51 points, or 0.15%, to 33920, the S&P 500
SPX,
-0.08%

declined 4 points, or 0.08%, to 4354, and the Nasdaq Composite
COMP,
+0.22%

gained 32 points, or 0.22%, to 14746. The Dow and S&P 500 marked a fourth straight day of losses, which was the worst stretch for the S&P 500 since mid-May.

What’s driving the market?

Worries about China’s indebted property company Evergrande eased somewhat on Wednesday, just as investors were turning their attention to the outcome of the two-day Federal Open Market Committee meeting.

While Hong Kong markets were closed for a holiday, Frankfurt-listed shares of China Evergrande surged 50% after a unit of the company, Hengda Real Estate Group, pledged to make an on-time interest payment on Thursday. Separately, China’s central bank reportedly injected liquidity as markets reopened after a two-day holiday.

Investors remain wary though, as Evergrande itself still faces two looming interest payments on bonds in coming days. Fear of a potential default by the giant Chinese property developer sparked concerns of a global financial sector crash such as occurred in 2008 when U.S. investment bank Lehman Brothers failed.

“While the markets are rebounding, we think its to soon to think the Evergrande situation will blow over without causing more near- term market pain,” said Peter Cardillo, chief market economist at Spartan Capital.

Investors are also waiting for the Fed’s policy decision later Wednesday, though most investors do not expect the FOMC to announce the start of tapering its bond purchases until its November or December meetings, said Neil Wilson, chief market analyst at Markets.com, in a note to clients.

Read: Fed could fracture in 2022 over when to raise interest rates, economist says

“That means this week’s meeting may be an appropriate moment for the Fed to give the market fair warning. Or not. In a sense it doesn’t matter much what they say or don’t say on tapering – the risk lies in what the Fed does or doesn’t say about rate hikes,” said Wilson, who added that the central bank is also likely to look through softer economic data and stock market pullbacks seen recently.

The Fed statement will come at 2 p.m. Eastern Time, followed by a news conference with Fed Chairman Jerome Powell at 2:30 p.m. Eastern. Ahead of that, investors will get an August update on existing home sales at 8:30 a.m. Eastern.

In Washington, the House voted late Tuesday to keep funding the government and avoid a shutdown, but faced opposition in the Senate given the Republican party’s opposition to raising the debt ceiling.

Which companies are in focus?
  • FedEx
    FDX,
    +0.51%

    shares dropped 5% in premarket trading after the shipping and logistics company lowered its outlook for the year, citing a tight labor market and higher expenses.

  • DraftKings
    DKNG,
    -7.42%

    shares slipped 0.3% after U.K.-listed betting group Entain
    ENT,
    +7.52%

    said it was considering a new, improved takeover from the digital sports betting and entertainment group.

  • Stitch Fix Inc.
    SFIX,
    -2.50%

    shares jumped 14% after the clothing-subscription company said it gained more clients and revenue rose 29% in the fourth quarter, driving more than $2 billion in annual sales for the first time.

How are other assets trading?
  • The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    1.342%

    rose 1 basis point to 1.337%. Yields and debt prices move in opposite directions.

  • The ICE U.S. Dollar Index
    DXY,
    -0.01%
    ,
    a measure of the currency against a basket of rivals was flat at 93.20.

  • Oil futures rose, with the U.S. benchmark
    CL00,
    +1.56%

    up 1.6% to $71.65 a barrel. Gold futures
    GC00,
    -0.23%

    fell 0.2% to $1,774.20 an ounce.

  • In Asia, Hong Kong was closed for a holiday, but reopening after a two-day break, China’s CSI 300
    000300,
    -0.70%

    fell 0.7%. The Nikkei 225 index
    NIK,
    -0.67%

    dropped 0.6%.

  • Markets in Europe rose. The Stoxx Europe 600 index
    SXXP,
    +0.67%

    rose 0.6% and London’s FTSE 100 index
    UKX,
    +1.28%

    gained 1.1%.

This post was originally published on Market Watch

Financial News

Daily News on Investing, Personal Finance, Markets, and more!