Traders work at the New York Stock Exchange (NYSE) in New York City, USA, on December 1, 2023.
Brendan Mcdermid | Reuters
U.S. stock futures rose Tuesday night as investors await the latest policy decision from the Federal Reserve.
Dow Jones Industrial Average Futures rose 42 points, or 0.11%. S&P 500 Futures and Nasdaq 100 Futures rose 0.11% and 0.18%, respectively.
Investors are coming off a fourth consecutive positive session for the major averages. During Tuesday's regular session, the S&P 500 gained 0.46% and the 30 shares Dow added 0.48%. Both indices hit their highest intraday levels since January 2022. Nasdaq Compositewhich reached its highest level since April 2022, closed with a jump of 0.7%.
Those gains come as traders prepare for the conclusion of the Fed's final meeting of 2023. The central bank is widely expected to hold the meeting. overnight benchmark borrowing rate stable in the 5.25% to 5.5% range, but investors will also analyze Fed Chair Jerome Powell's comment for clues as to how soon rate cuts can be expected. As things stand, the CME FedWatch tool shows that markets are pricing in the odds of rate cuts starting next spring.
But that's a scenario Powell could choose to reject, especially as yields move away from their highs and the Fed does less work to cool the economy. The 10-year Treasury yield last hovered around 4.2%, despite topping 5% in October.
"It may hint that some of the potential easing is happening," Liz Ann Sonders, chief investment strategist at Charles Schwab, said on "CNBC."Closing bell" on Tuesday.
"To me, that's what I'm going to focus on, is whether he sort of does the opposite of what he did when he said that rising yields had caused some of the Fed's tightening," Sonders added. .
Investors will also be keeping an eye on the November Producer Price Index, which will be released Wednesday at 8:30 a.m. ET ahead of the Federal Reserve's decision. Economists surveyed by Dow Jones expect a 0.1% increase, compared with a 0.5% drop in the previous year. last month. Excluding food and energy, it is forecast to have risen 0.2%, compared to a flat reading the previous month.
