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The
U.S. central bank is expected to maintain its key rate in the
range of 5.25%-5.50% as it concludes its meeting at 2 p.m. ET,
with investors focused on economic projections and Chair Jerome
Powell's comments for clues on the outlook for rates and
inflation.
Recent economic data has signaled an easing in core inflation,
fuelling bets that interest rates have likely peaked, but
surging oil prices have clouded the outlook for headline
inflation, providing the Fed room to keep rates higher for
longer.
"The Fed's updated projections are likely to show one more hike
in 2023, higher growth in 2023/24 but with the aim to stabilize
inflation," said Gabriele Foà, portfolio manager at Algebris
Investments.
Uncertainty around the rates trajectory and the impact on the
economy sparked a selloff on Tuesday, as Canada's inflation rate
jumped on higher gasoline prices while data showed a
steeper-than-expected plunge in U.S. housing starts.
"In the near future, we think economic weakness will take a more
central role in the market narrative," Foà said.
Financial markets have priced in a 99% chance the Fed will pause
rates on Wednesday and a near 73% likelihood the central bank
will keep them unchanged in November, according to CME's
FedWatch tool.
Investors were also looking forward to the debut by marketing
automation company Klaviyo on the New York Stock Exchange
against the backdrop of some recent successful U.S. listings.
Klaviyo had secured a valuation of $9.2 billion in its initial
public offering after pricing the shares above their indicated
range.
Instacart lost 4.0% in premarket trading after ending 12% higher
in its Nasdaq debut on Tuesday, while Arm Holdings shed 1.7%
At 6:57 a.m. ET, Dow e-minis were up 73 points, or 0.21%, S&P
500 e-minis were up 8.5 points, or 0.19%, and Nasdaq 100 e-minis
were up 24.5 points, or 0.16%.
Dollar General fell 1.9% after J.P. Morgan downgraded the
discount store operator to "underweight".
Pinterest added 3.9% as Citigroup upgraded the image-sharing
platform to "buy" from "neutral" and as the firm announced a
share buyback of up to $1 billion.
Coty added 4.5% after the CoverGirl parent raised its annual
like-for-like sales forecast.
(Reporting by Ankika Biswas and Shristi Achar A in Bengaluru;
Editing by Arun Koyyur)
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