All eyes on Fed decision
Wall Street looked set to open mixed on Wednesday, a day after all three major averages closed lower, as market participants awaited the outcome of a U.S. Federal Reserve’s policy meeting.
The central bank is widely tipped to announce an acceleration of the tapering of its massive $120 billion monthly bond-buying program, which it launched in the early days of the Covid-19 pandemic.
The announcement is due at 2:00 p.m. ET, followed by Chair Jerome Powell’s news conference 30 minutes later.
Traders will be paying close attention to Powell’s tone and new forecasts, seeking hints on the Fed’s thinking on how President Joe Biden’s policies will impact inflation and the economy.
As of 5:20 a.m. ET, futures tied to the blue-chip Dow Jones were up 37 points, or 0.1% to 35,589. The tech-heavy Nasdaq 100 futures dropped 48.25 points, or 0.3% to 15,876.5 while S&P 500 futures were unchanged.
Crude future slide on IEA warning
In energy markets, crude futures were tumbling early Wednesday following a warning from the International Energy Agency (IEA) that the global energy market has already returned to surplus.
The IEA said on Tuesday that a rise in Covid-19 infections coupled with the emergence of the omicron variant will hurt global oil demand at the same time that crude production is expected to go up, particularly in the U.S., with production set to surpass demand through at least the end of 2022.
“The surge in new Covid-19 cases is expected to temporarily slow, but not upend, the recovery in oil demand that is under way,” the agency said, according to Bloomberg News.
Its forecast contrasts with the view of the Organization of the Petroleum Exporting Countries (OPEC), which raised its world oil demand forecast for the first quarter of 2022 earlier this week.
As of 5:20 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures were down 89 cents, or 1.26% to $69.84 a barrel. Brent crude futures rose 79 cents, or 1.07% to $72.91 barrel.
U.S. to blacklist more Chinese
Meanwhile, stock of Chinese healthcare and tech companies on Wednesday amid reports that the Biden administration plans to blacklist more Chinese firms this week.
According to a report by the Financial Times, the administration plans to blacklist eight Chinese firms including DJI, the world’s largest commercial drone maker, over its their alleged involvement in the surveillance of the Uyghur Muslim minority.
Two people briefed on the matter told the news outlet that the U.S. Treasury plans to put DJI and the other companies on its “Chinese military-industrial complex companies.”
Americans are banned from investing in the 60 Chinese companies already on the blacklist.