Dow Jones futures and S&P 500 futures tilted higher Wednesday morning, while Nasdaq futures fell slightly. The Fed meeting decision is front and center for investors today.
The stock market rally attempt suffered another blow Tuesday as the Nasdaq tumbled back below its 50-day line, though the indexes closed well off intraday lows.
The final growth leaders are up against the wall. Tesla (TSLA) broke below recent lows intraday. Microsoft stock and Google parent Alphabet (GOOGL) showed real strain, with GOOGL stock undercutting its 50-day line intraday. Nvidia stock and Advanced Micro Devices (AMD) did manage to hold key support after skidding lower in the past few weeks.
Apple (AAPL), though still comfortably above all its moving averages, reversed lower for a second straight session.
Meanwhile, software and other growth names that had bounced back in the rally attempt — such as Adobe (ADBE), Fortinet (FTNT) and Datadog (DDOG) ¯ are tumbling lower again. Growth stocks hit new lows intraday.
There are pockets of strength in the market but, as with Apple stock, some of those areas lost ground Tuesday.
Bottom line: The stock market rally attempt is looking sickly heading into a major news event. Investors should be taking a defensive approach.
Nvidia (NVDA), Microsoft (MSFT), Tesla, AMD and Google stock are on IBD Leaderboard. Microsoft, Adobe, Google and Fortinet stock are on IBD Long-Term Leaders. Microsoft, Google, Nvidia and AMD stock are on the IBD 50. Tesla stock was Tuesday’s IBD Stock Of The Day.
Fed Meeting
The final Fed meeting of the year concludes Wednesday, with the policy announcement due at 2 p.m. ET. Fed chief Jerome Powell and several of his colleagues have signaled their support or willingness to discuss a faster bond taper. That’s after finally agreeing to begin scaling back asset purchases at the November Fed meeting. A faster taper could set the stage for Fed rate hikes before mid-2022.
The omicron Covid variant is a wild card. While the infectious coronavirus strain may curb economic growth in the short run, there’s a growing consensus that it’s not a game changer. With consumer inflation at a 39-year high of 6.8%, wholesale inflation at a record 9.6% and initial jobless claims at the lowest since 1969, the Fed doesn’t want to fall any further behind the curve.
Investors have likely priced in a faster bond taper. But a big question is whether or not policymakers will pencil in two Fed rate hikes in 2022, or three. Will policymakers also signal support for ultimately reducing the central bank’s massive balance sheet?
Fed chief Jerome Powell’s press conference at 2:30 p.m. ET will likely be crucial as well.
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. above fair value. S&P 500 futures edged higher and Nasdaq 100 futures fell 0.1%.
The 10-year Treasury yield edged up to 1.45%. U.S. crude oil futures fell 1%,…
Read More: Dow Jones Futures: Stock Market At Turning Point As Fed Decision Looms;