U.S. equity index futures pointed to a modestly higher open Wednesday as traders positioned for what could be Federal Reserve Chair Jerome Powell's final policy decision and a torrent of Big Tech earnings, while crude oil extended a two-day rally on Middle East supply risk.
Contracts on the S&P 500 and the Dow Jones Industrial Average were slightly higher, while the Nasdaq 100 outperformed after stocks pulled back from record highs on Tuesday.
Pre-Market Snapshot (Quotes as of 7:30 a.m. ET)
- S&P 500 Futures: 7,180 (+0.13%)
- Dow Futures: 49,332 (+0.07%)
- Nasdaq-100 Futures: 27,285 (+0.43%)
- Russell 2000 Futures: 2,776.20 (+0.32%)
- VIX: 17.94 (+%)
- WTI Crude Futures: $102.77 (+2.84%)
- Gold Futures: $4,582.40(-0.56%)
- EUR/USD: 1.1703 (-0.07%)
- Bitcoin (USD): $76,550 (+1.74%)
Fed in focus as Powell's term winds down
Markets are closely watching the conclusion of the Fed's April policy meeting. While no change to interest rates is expected, the meeting could be Powell's last before his term ends in May. On Capitol Hill, the Senate Banking Committee will vote Wednesday on whether to confirm Kevin Warsh's nomination as the next Fed chair, on the very same day as Powell's final FOMC meeting at the helm.
Some of the political drama was defused after the Justice Department announced Friday that it was ending its criminal investigation into Powell, likely clearing the way for the Senate to confirm Warsh by May 15.
Mag 7 earnings on deck
The afternoon brings a heavy earnings docket. Four members of the "Magnificent Seven,” namely Alphabet, Amazon, Meta and Microsoft, are all set to report after Wednesday's close. The releases follow a tech-led pullback Tuesday, when the S&P 500 closed 0.49% lower and the Nasdaq Composite dropped 0.90%, pressured by a report signaling weakness at OpenAI and higher oil prices. Nvidia lost 1.5%, Broadcom shed over 4%, AMD fell 3%, Intel dropped 1%, and Oracle slid more than 3%.
Pre-market movers
- Robinhood (HOOD): Slid around 10% in pre-market after the company reported Q1 profit and revenue fell short of Wall Street estimates.
- Starbucks (SBUX): After Tuesday's close, reported its second straight quarter of traffic growth and raised its full-year outlook, with revenue topping estimates.
- Seagate Technology Holdings: Shares of storage solutions company jumped over 17% following solid quarterly results. Peer Western Digital’s shares also moved in sympathy.
Commodities: crude extends gains, gold pulls back
Energy markets remained the standout. West Texas Intermediate (WTI)-grade crude was last quoted nearly $103 a barrel, up over 3%, building on Tuesday's surge when it jumped more than 3% to settle at $99.93 and Brent gained 2.8% to close at $111.26.
Brent rallied to more than $114-a-barrel, its highest since March 31, as traders assessed proposals to re-open the Strait of Hormuz, through which 20% of the world's crude flowed before the outbreak of the Iran war.
Geopolitical risk remains acute. President Trump and his national security team are reportedly skeptical of Tehran's proposal to halt attacks on ships in the Strait of Hormuz in exchange for an end to the conflict. Adding to the supply-side noise, the United Arab Emirates announced Tuesday that it will leave OPEC and the wider OPEC+ group effective May 1. The UAE has been a longtime member of OPEC, first through Abu Dhabi in 1967 and then as its own country since 1971.
Gas prices at the pump continue to track crude. The average nationwide price for a gallon of regular gas topped $4.2, the highest since August 2, 2022, according to AAA.
Gold gave back some of its recent advance. Agricultural markets were also active overnight, with the CBOT wheat hitting its highest level in nearly two years after the latest USDA Crop Progress report showed only 30% of the winter wheat crop rated good to excellent as of April 26.
Forex: dollar mixed ahead of FOMC
The greenback firmed up slightly, going into the New York open. The yen remains under pressure after the Bank of Japan kept its policy rate steady at 0.75% on Tuesday.
Overnight: Asia Close Mixed
Asian equities ended mixed as traders took stock of Wall Street’s tech-led decline overnight and looked ahead to the Fed decision. South Korea's Kospi rose 0.75% to 6,690.90 while the small-cap Kosdaq declined 0.86% to 1,215.58, and Hong Kong’s Hang Seng and Chinese Shanghai Composite Index gained. On the other hand, the Australian, Singaporean and Taiwanese averages retreated.
What to watch today
- FOMC rate decision and Powell press conference (afternoon)
- Senate Banking Committee vote on Kevin Warsh's Fed chair nomination
- Post-close earnings: Microsoft, Alphabet, Meta, Amazon and Qualcomm
- Headlines on the Strait of Hormuz and any U.S. response to Iran's latest proposal
- Follow-through in WTI and Brent after the UAE's OPEC+ exit announcement
