Even though there are worries about stress in the banking system, market participants anticipate that the Federal Reserve will raise interest rates by a quarter point on Wednesday.
It is also expected that the central bank will release projections about the economy and the path of rate hikes; however, some economists believe that the central bank may have a difficult time making these forecasts due to the uncertainty.
Additionally, investors are looking for reassurance from the Fed that the problems that have been plaguing regional banks will be brought under control.
On Wednesday, stock futures traded slightly lower as investors awaited the next move that the Federal Reserve would make in its plan to increase interest rates to combat inflation.
Futures contracts linked to the Dow Jones Industrial Average dropped 29 points, which is equivalent to a 0.1% loss. Futures contracts for the S&P 500 fell by 0.1%, while those for the Nasdaq-100 fell by 0.2%.
During the previous session, the major averages all demonstrated significant gains. The Dow Jones Industrial Average rose by 316 points, which is equivalent to nearly one percent. The S&P 500 index went up by 1.3%, while the Nasdaq Composite index went up by 1.58%.
Investors were heartened by the increasing likelihood that the end of the Fed’s policy tightening is getting closer, which led to the moves, which came at a time when fears over the ongoing banking crisis showed signs of easing.
According to the FedWatch tool provided by CME Group, as of the morning of Wednesday, there is approximately an 85% chance that the Fed will raise interest rates by a quarter of a point. In the meantime, there is a probability that there will be no increase of approximately 15%.
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