Investors were cautious Tuesday night as they awaited the Federal Reserve’s rate policy decision, causing futures linked to major indices to slide slightly. The broader market index futures dipped 0.07%, while Nasdaq 100 futures saw a steeper drop of 0.29%. However, Dow Jones Industrial Average futures managed a marginal rise of 0.03%, climbing by 10 points.
In after-hours trading, Amazon shares rose about 1% after the company reported better-than-expected earnings and revenue for the first quarter. On the flip side, chipmaker Advanced Micro Devices saw a significant tumble of more than 6% following its in-line revenue forecast for the current quarter. Similarly, Super Micro Computer’s stock dropped by 9% after its revenue came in slightly below the Street’s consensus estimates.
Tuesday’s main trading session witnessed losses across the board, with the Dow and S&P 500 each shedding over 1%, while the Nasdaq Composite declined by 2%. The jump in bond yields, triggered by higher-than-expected employment cost index data for the first quarter, reignited concerns about prolonged high-interest rates by the Fed.
With eyes now on the Fed’s interest rate decision, expected Wednesday afternoon, traders are anticipating Jerome Powell’s comments for clues on future rate adjustments. Amid concerns of sticky inflation, the Fed is likely to take a cautious approach before considering rate cuts.
On the earnings front, several big names are set to report Wednesday, including Pfizer, Kraft Heinz, CVS Health, Qualcomm, and DoorDash.
In other news, Japanese trading house Mitsui and Co reported a decline in profit for its 2023 financial year, despite which its shares climbed after announcing a share buyback.
The sudden strengthening of the yen on Monday was attributed to intervention by Japanese authorities, as reported by Reuters. This intervention likely influenced currency trades, which take two days to settle.
South Korea’s trade data for April showed a sharp increase in exports, beating economists’ expectations. However, imports saw a smaller rise than anticipated, leading to a narrower trade balance compared to the previous month.
Utilities were among the few sectors in the S&P 500 to post gains for April, with NextEra Energy and Consolidated Edison contributing to the sector’s positive performance.
Bank of America revised its forecast for the Federal Reserve’s interest rate decisions, pushing back the expected timeline for rate cuts and revising upward its estimates for the terminal rate.
In after-hours trading, Starbucks shares slipped nearly 10% after the company missed fiscal second-quarter estimates, while Pinterest shares surged almost 19% following an earnings beat in the first quarter. However, Super Micro Computer shares dropped nearly 8% after the company’s fiscal third-quarter revenue missed estimates.
