US Stock Index Futures

US Stock Index Futures Flat as Investors Eye Asia Markets Ahead of Fed Decisions, Earnings Reports

U.S. stock index futures are trading nearly flat in the pre-market session early Wednesday after retreating from record highs reached the previous session. Tuesday’s lower close snapped a five-day winning streak in both the cash and futures markets as the highly anticipated tech-heavyweight earnings reports released after the close failed to move the needle much.

At 02:52 GMT, September E-mini S&P 500 Index futures are trading 4398.00, up 3.50 or +0.08%. September E-mini Dow Jones Industrial Average futures are at 34952, down 1 or -0.00% and the September E-mini NASDAQ-100 Index is trading 14948.50, up 0.25 or +0.00%.

During the overnight session, the focus is being spread between the after-market earnings reports from Alphabet, Microsoft and Apple, Wednesday’s reports from Pfizer, McDonald’s, Qualcomm, Facebook, Ford and PayPal, the turmoil in China due to the country’s crackdown on technology firms and the Federal Reserve’s monetary policy decisions.

Tuesday’s Recap

The major U.S. equity markets fell from record highs on Tuesday as a sell-off in Chinese shares, economic growth concerns and the Federal Reserve’s policy meeting put investors on guard and drove profit-taking.

Unsettled by events in China overnight, where share prices skidded on concerns about the impact of a recent tightening in government regulations, global stock markets pulled back on Tuesday as volatility spiked.

In other developments, a host of megacap tech names reported quarterly results on Tuesday after the U.S. market closed, including Apple, which beat top- and bottom-line estimates and said iPhone sales jumped 50% year over year. Google-parent Alphabet also posted quarterly results, registering a 69% jump in advertising revenue, while Microsoft beat earnings despite a dip in revenue from its Windows division.

Wednesday’s Outlook

Investors are likely monitoring new developments in Asia early Wednesday since steep declines in the region were one of the reasons U.S. investors used to book profits the previous session.

In morning trading on Wednesday, Hong Kong’s Hang Seng Index is down 0.28% after an earlier jump of more than 1%. Chinese tech stocks in Hong Kong, among the hardest hit in the recent sell-off, were mixed in Wednesday’s morning trade.

On Wednesday, the Federal Open Market Committee will release a statement followed by remarks from Chairman Jerome Powell during a press conference.

Investors aren’t expecting any major developments at this meeting, but they do expect the Fed to say it looked deeper into when and how it will start removing its emergency stimulus from the economy. Some analysts want Powell to address inflation, while others believe he will stick to his “it’s transitory” proclamation.

Finally, after removing concerns about coronavirus from its June statement, policymakers may mention the subject again due to the surge in COVID-19 infections.

Meanwhile, the busiest week of earnings continues on Wednesday with Pfizer, McDonald’s, Qualcomm, Facebook, Ford and PayPal among the major companies reporting. Of the S&P 500 companies that have reported quarterly results thus far, 89% have topped earnings estimates, while 86% have exceeded revenue expectations, according to data from Refinitiv.

For a look at all of today’s economic events, check out our economic calendar.

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James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.