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Stock-index futures point to a higher start for the market on Wednesday as investors await a look at first-quarter gross domestic product data expected to be dented by the COVID-19 pandemic and the outcome of a two-day Federal Reserve policy meeting as first-quarter earnings continue to flow in.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, +0.59% rose 165 points, or 0.7%, to 24,210, while S&P 500 futures ES00, +0.71% were up 24.30 points, or 0.9%, at 2,891.50. Nasdaq-100 futures NQ00, +0.97% added 90.50 points, or 1%, to trade at 8,810.25.
Stocks gave up early gains Tuesday to end lower, with the Dow DJIA, -0.13% snapping a four-day winning streak to close at 24,101.55, down 32.23 points, or 0.1%. The S&P 500 SPX, -0.52% lost 15.09 points, or 0.5%, to close at 2,863.39, while the Nasdaq Composite COMP, -1.40% settled at 8,607.73, down 122.43 points, or 1.4%.
What’s driving the market?
The Fed remains the main event, analysts said, though few analysts expect the central bank to take new action after a series of emergency measures since March in response to the coronavirus crisis. The Fed has slashed rates to nearly zero, unleashed an unlimited bond-buying program and moved to backstop loans to Main Street and ensure financial markets continue to function.
Read:Here’s the latest on the Fed’s actions to keep credit flowing to the U.S. economy
“With the Fed having already dramatically cut rates by 1% in March, the question is whether there is much left to do on that front. The decision to pledge $4 trillion to funding to the financial system also highlights a willingness to go over and above what any other central bank is doing,” said Joshua Mahony, senior market analyst at IG, in a note.
“With the economy expected to improve gradually as lockdowns are lifted, the question is whether the [Federal Open Market Committee] will feel the need to act or simply wait and take advantage of their newfound penchant for taking action outside of their typical schedule,” he said.
The Fed will conclude its two-day meeting with a statement, due at 2 p.m. Eastern, followed a half-hour later by Chairman Jerome Powell’s virtual news conference.
Economists expect the Fed’s message to be aimed at reassuring investors and the public that it has the largest economic downturn since the Great Depression under control. Since the beginning of March, the Fed has cut interest rates to zero and increased the assets on its balance sheet by more than $2 trillion since the beginning of the crisis to a record $6.6 trillion.
See:The Fed has a simple goal this week — project confidence in the face of the unknown
Before Tuesday’s pullback, gains for stocks were attributed to optimism over efforts by European countries and some U.S. states to begin easing up on lockdowns aimed at slowing the spread of COVID-19, though worries linger that a push to lift restrictions too quickly could see the number of cases reaccelerate.
The global case tally climbed to 3.13 million on Wednesday, according to data aggregated by Johns Hopkins University. The death toll rose to 217,555. At least 935,308 people have recovered. The U.S. has the highest case toll at 1.01 million and the highest death toll at 58,355.
Before the Fed decision, investors will get data on first-quarter gross domestic product at 8:30 a.m. Eastern. Economists surveyed by MarketWatch, on average, look for a 3.9% annualized fall in GDP after a 2.1% expansion in the fourth quarter. The first-quarter decline is expected to be only a foretaste of the economic carnage caused by the pandemic lockdowns in the current quarter.
March pending home-sales figures are due at 10 a.m. Eastern.
Investors were sifting through another deluge of first-quarter earnings reports.
Which companies are in focus/
- Google parent Alphabet Inc. GOOG, -3.30% GOOGL, -3.01% delivered first-quarter results after the closing bell Wednesday, with earnings suffering from a “significant slowdown” in ad sales, though revenues topped expectations. Shares were up more than 7% in premarket action. Opinion: Google gives Wall Street what it wants, and the stock shoots higher
- Shares of chip maker Advanced Micro Devices Inc. AMD, -1.73% were 2.8% lower ahead of the opening bell, after the company late Wednesday said the COVID-19 pandemic would trim its growth in 2020. First Take:AMD has only one question still lingering about COVID-19 effects
- Starbucks Corp. SBUX, +1.22% shares declined 1.8% in premarket trade after the coffee-chain giant fell short of earnings expectations that had already been trimmed due to worries about the effect of the pandemic on sales.
- Shares of Ford Motor Co. F, +4.06% were down 2.8% premarket after the auto maker reported a wider-than-expected first-quarter loss of $2 billion, or 50 cents a share, and missed sales expectations as the coronavirus outbreak continues to eliminate demand for cars, and trucks and keeps factories closed.
- General Electric Co. GE, +5.75% shares were off 1% in premarket trading, after the industrial conglomerate reported first-quarter adjusted profit and free cash flow expectations that came in below estimates but topped revenue forecasts.
