Stock futures flat after 2-day losing streak for major averages
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, April 6, 2022.
Brendan McDermid | Reuters
Stock futures were flat in overnight trading on Wednesday after a two-day losing streak for major averages as investors digested the Federal Reserve’s plans to tighten monetary policy.
Dow Jones Industrial Average futures fell 30 points. S&P 500 futures edged down 0.1% and Nasdaq 100 futures were little changed.
The back-to-back selloff came as Fed meeting minutes showed officials planned to cut their trillion bonds with a consensus amount of around $95 billion. Meanwhile, policymakers have indicated that one or more 50 basis point interest rate hikes may be warranted to combat soaring inflation.
“The minutes of the last FOMC meeting show a higher level of urgency than the previous communication, as the Fed has committed to reduce the balance sheet faster than market participants would have expected,” he said. said Charlie Ripley, senior investment strategist at Allianz Investment. Management.
Officials “generally agreed” that a maximum of $60 billion in treasury bills and $35 billion in mortgage-backed securities would be allowed to transfer, phased over three months and likely beginning in May.
On Wednesday, the blue-chip Dow fell more than 100 points, while the S&P 500 slid 1%. The tech-heavy Nasdaq Composite fell another 2.2%, bringing its week-to-date losses to 2.6%.
“It looks like they are talking about the possibility of raising rates by 50 basis points at the next meeting, so the hope is that the message is telegraphed well in advance,” said Brian Price, head of investment management at Commonwealth Financial Network. “I expect volatility to remain elevated for the time being as there is a lot of uncertainty for investors to digest right now.”
Investors await weekly unemployment claims data Thursday morning, which is expected to show a total of 200,000 claims filed.
Shares of Levi Strauss & Co. rose more than 1% in extended trading on Wednesday after the denim retailer reported quarterly earnings and revenue that beat analysts’ estimates.