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U.S. stock futures rose on Wednesday, while Treasury yields stabilized and oil prices fell to a six-month low, as investors awaited the Federal Reserve's final policy meeting of the year in search clarity on interest rates and growth prospects for 2024.
The Federal Reserve is widely expected to keep its benchmark interest rate at a two-decade high between 5.25% and 5.5% when it concludes its two-day policy meeting today in Washington.
The central bank's rate-setting committee, chaired by Jerome Powell, is likely to focus on stubbornly high core inflation rates and a resilient labor market when it releases its rate decision and statement at 2 p.m. The report will also include new growth and inflation forecasts for the world's largest economy.
The new Summary of Economic Projections, known colloquially as dot plots, could prove crucial in plotting the Fed's near-term forecasts following the September release calling for no rate cuts in 2024 and the current market forecast for at least four.
Related: Fed Chair Powell May Lean Into Rate Cut Bets After Troubled November Inflation Report
Bond markets were steady ahead of today's decision, following a trio of solid, but by no means spectacular, Treasury bond auctions earlier this week. These include a $37 billion 10-year bond sale on Monday and a $21 billion 30-year bond sale yesterday.
The benchmark 10-year note held near a three-month low of 4.187% in early trading in New York, while the 2-year bond was last at 4.726%. The 2-year bond has added about 20 basis points (0.2 percentage points) so far. this month following more positive-than-expected November inflation and employment reports.
Meanwhile, the US dollar index rose 0.14% to 104.012, bringing its December gain to around 0.5%.
In other markets, oil prices fell to an early June low in overnight trading, before finding support ahead of today's release of Department of Energy data on national crude stockpiles. The report comes amid growing concerns about demand in a slowing global economy.
Brent crude futures contracts for February delivery, the global price benchmark, last traded 15 cents higher in the session at $73.38 a barrel. WTI contracts for January rose 13 cents to $68.74 a barrel.
On Wall Street, futures linked to the S&P 500 suggest an opening gain of 3 points. Last night, the S&P closed at a January high of 4,643.70 points to bring its 2023 gain to around 20.4%.
Futures linked to the Dow Jones Industrial Average indicate an advance of 30 points. The tech-focused Nasdaq, which is up 38.9% for the year, is 25 points higher.
In overseas markets, Europe's Stoxx 600 rose 0.24% in early Frankfurt trading, while Britain's FTSE 100 added 0.27% ahead of interest rate decisions from the European Central Bank and from the Bank of England tomorrow.
Overnight in Asia, a muted statement from the Central Economic Work Conference, a key political event held by policymakers in Beijing, triggered another round of selling in Chinese stocks. The measure caused the MSCI benchmark index excluding Japan at the regional level to drop 0.44% at the close of the day.
Meanwhile, the Nikkei 225 closed up 0.25% in Tokyo, boosted by technology and financial stocks, to bring its third-quarter gain to around 3.1%.
