U.S. stock futures are little changed Wednesday as investors await the outcome from the Federal Reserve’s two-day policy meeting and comments from Fed Chair Jerome Powell later in the day.
Dow Jones Industrial Average futures gained about 35 points. S&P 500 futures were flat. Nasdaq 100 futures lost 0.2%.
The 10-year Treasury yield rose to a fresh 13-month high in early trading. The yield climbed as high as 1.646%, which exceeded its recent high on Friday of 1.642% and was the highest since early February 2020.
On Wednesday, the Fed will release new economic and interest rate forecasts, which could indicate Fed officials expect to raise rates by, or even before, 2023. The central bank is expected to acknowledge stronger growth, which should put the Fed’s easy policies in the spotlight, especially given the new $1.9 trillion in federal stimulus spending.
Investors will also hear from Fed Chair Powell, who is likely to move the stock and bond markets with his commentary, despite being unlikely to offer specifics.
“There’s this assumption [Powell’s] going to be dovish tomorrow. With another round of spending, it’s hard for him not to be dovish. They are definitely afraid of scaring the market. They’re afraid of disrupting the recovery,” Peter Boockvar, chief investment officer of Bleakley Advisory Group, told CNBC.
Treasury yields rose slightly on Tuesday during the first day of the Fed’s meeting. The 10-year Treasury yield remains over 1.6%, after hitting its highest level in a year last week.
Rising interest rates have been an overhang for stocks in recent weeks, specifically the tech sector. The jump in yields has forced a shift into value stocks from growth, pushing the Dow Jones Industrial Average and S&P 500 to hover near record highs.
A strong vaccine rollout and the easing of state lockdown restrictions have also boosted reopening stocks.
On Tuesday, the Dow lost nearly 130 points, dragged down by a near 4% drop in Boeing’s stock. The 30-stock average snapped a seven-day winning streak, The S&P 500 dipped 0.16%, after setting a record high during the trading session.
The Nasdaq Composite was the relative outperformer, rising 0.09% as Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all registered gains. The technology-heavy index was up more than 1% at one point in the session.
—CNBC’s Patti Domm contributed to this report.
