Wednesday March 16th


Dow futures jump 300 points as Wall Street tries to rally for a second day, Fed decision ahead

U.S. stock market index futures rose Wednesday as traders tried to build on the sharp gains from the previous session, while Wall Street awaited the Federal Reserve’s latest monetary policy decision. Futures on the Dow Jones Industrial Average climbed 298 points, or 0.9%, and S&P 500 futures rose 0.9%. Nasdaq 100 futures jumped 1.4%. Micron Technology was among the best-performing S&P 500 stocks in the premarket, gaining more than 4%. Starbucks shares also climbed 3.5%, while Dow member Boeing advanced 2.3%. Several Chinese stocks rocketed more than 20% higher after China signaled its support for overseas listings, after days of worries around delisting led them to tumble. Pinduoduo surged 35% and DiDi Global jumped 41%. Futures were rallying in part on signs that a ceasefire could be possible in the Russia-Ukraine war. Ukrainian President Volodymyr Zelenskyy said a peace agreement was beginning to “sound more realistic” in an address to the nation Tuesday. Russian Foreign Minister Sergey Lavrov told the BBC there was “some hope of reaching a compromise.” Russian State media quoting the Kremlin echoed similar sentiments overnight. The war between Ukraine and Russia has sent ripples through global financial markets, sending commodity prices sharply higher and stocks lower. However, some commodities have cooled off in recent days, while the U.S. equity market tries to find its footing. U.S. oil traded at around $95.70 per barrel Wednesday, after topping a multiyear high of $130 earlier this month. Stocks, meanwhile, are coming off a stellar session in which the Dow surged nearly 600 points, while the S&P 500 snapped a three-day losing streak. To be sure, all eyes are on the Fed on Wednesday, as the central bank wraps up a key two-day policy meeting. The Fed is widely expected to raise rates by a quarter-point, the first hike since 2018. Watchers are also expecting the central bank to offer a new quarterly forecast that could indicate five or six more hikes this year. My guess is it’s going to sound a little more hawkish than people want it to sound, and that’s going to be a little tough to digest, particularly in the fixed income markets,” David Zervos, chief market strategist at Jefferies told CNBC’s “Closing Bell” on Tuesday. “I think the equity market might digest it a little bit better, but it’s going to be a tough swallow.” The Fed is expected to announce an interest rate decision and economic projections at 2 p.m. on Wednesday, which will followed by a briefing from Federal Reserve Chair Jerome Powell. Shares in Asia-Pacific were higher in Wednesday trade, as Chinese stocks saw a strong rebound following recent heavy losses. Hong Kong’s Hang Seng index closed 9.08% higher at 20,087.50 — its best day since Oct. 30, 2008, when it gained 12.82%. Still, the benchmark index is down more than 2% so far this week after seeing heavy losses on Monday and Tuesday. Mainland Chinese stocks also saw robust gains as the Shanghai composite climbed 3.48% to close at 3,170.71 and the Shenzhen component soared 4.019% to 12,000.96. The bulk of the gains Wednesday came after a Chinese state media report signaled support for Chinese stocks. U.S. and Chinese regulators are progressing toward a cooperation plan on U.S.-listed Chinese stocks, the report said, citing a financial stability meeting Wednesday chaired by Vice Premier Liu He. In Japan, the Nikkei 225 climbed 1.64% to close at 25,762.01 while the Topix index gained 1.46% to 1,853.25. South Korea’s Kospi advanced 1.44% on the day to 2,659.23. Oil fell below $100 a barrel in a volatile session on Wednesday, as it came under pressure from signs of progress in Russia-Ukraine peace talks and a closely-watched report that cut its forecast of world demand. Ukraine’s president said the positions of Ukraine and Russia were sounding more realistic, but time was needed. Russia’s foreign minister said some deals with Ukraine were close to being agreed. “Fears of a supply disruption have been tempered by tentative signs of progress in ceasefire talks between Russia and Ukraine,” said Stephen Brennock of oil broker PVM. “That said, an end to hostilities still seems like a long way off.” Brent crude fell 60 cents to $99.35 per barrel, having traded as high as $103.70 earlier. U.S. West Texas Intermediate (WTI) crude slipped 41 cents to $96.03 per barrel. Gold steadied on Wednesday, with a weaker dollar offsetting pressure from higher U.S. Treasury yields as investors await the first pandemic-era U.S. Federal Reserve interest rate hike. Spot gold was flat at $1,917.91 per ounce at 1015 GMT, after touching its lowest since March 1 at $1,906 on Tuesday. U.S. gold futures fell 0.3% to $1,923.40.