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

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%.