Federal Reserve Chair Jerome Powell.
US futures dipped on Wednesday, while global stocks moved broadly higher as investors waited for the Federal Reserve’s interest rate decision and digested more earnings reports from major companies.
Futures for the tech-heavy Nasdaq 100 slipped 0.11%, after the index closed slightly lower on Tuesday. Dow Jones futures dipped 0.15% but S&P 500 futures climbed 0.06% after both closed roughly flat the previous day.
In Europe, the continent-wide Stoxx 600 was down 0.09%, despite Germany’s Deutsche Bank jumping 7.2% after posting its best quarterly profit since 2014. In the UK, Lloyds rose 3.5% after the bank also reported a surge in profit.
“We don’t expect any substantive new signal yet on tapering – or tightening – even as the tone on the economy is more positive than in March,” Jim O’Sullivan, chief US macro strategist at TD Securities, said in a note.
O’Sullivan said TD now thinks the Fed will start tapering – that is, cutting back on bond purchases – in March 2022 rather than September 2022 as previously expected.
Aaron Anderson, senior vice-president of research at Fisher Investments, said: “One of the Fed’s biggest challenges is to convince the market it means what it says, especially as base effects and supply-chain bottlenecks cause certain inflation data to tick temporarily higher.
“The market will be listening closely for any signs the Fed is wavering on its ultra-accommodative policies.”
US bond yields rose on Tuesday night and Wednesday morning, with the yield on the key 10-year US Treasury note climbing