U.S. stock futures climbed on Wednesday in premarket hours as Wall Street awaits the Federal Reserve’s final interest rate decision for 2024 and its monetary policy forecasts for 2025.
On Tuesday, the Dow Jones index fell for the ninth session in a row to record its longest losing streak since 1978.
The 10-year and two-year Treasury notes yielded 4.40% and 4.25%, respectively. The Federal Open Market Committee will announce its decision later in the day after a two-day meeting.
It is widely expected to announce another interest rate reduction at the conclusion of their meeting on Wednesday. Expectations of a 25 basis point rate cut rose to 95.4%, from 58.7% a month ago, according to CME Group’s FedWatch tool.
If the Fed cuts rates, it would be the third consecutive cut, bringing the federal funds rate down from its current level of 4.50% to 4.75%. Following the meeting, Chairman Jerome Powell’s remarks will be closely scrutinized by market participants.
Investors will receive another critical economic data point on Friday with the release of the November personal consumption expenditures (PCE) inflation index. This release follows other inflation indicators that suggest price increases accelerated in November.
Prior to that, GDP revisions on Thursday will reveal whether the economy maintained the previously estimated 2.8% growth rate for the third quarter.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.24% |
| S&P 500 | 0.28% |
| Dow Jones | 0.24% |
| Russell 2000 | 0.49% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY was up 0.25% to $605.80 and the Invesco QQQ Trust ETF QQQ rose 0.24% to $537.09, according to Benzinga Pro data.
Cues From The Last Session
The Dow Jones Industrial Average extended its losing streak to nine consecutive sessions on Tuesday, its longest downturn since 1978. This negative trend weighed on the broader U.S. stock market.
While Tesla shares rallied after a positive analyst upgrade, Nvidia experienced a slight decline.
On the economic front, U.S. retail sales exceeded expectations in November, suggesting increased consumer spending. However, industrial production contracted, signaling a slowdown in manufacturing activity.
The S&P 500 saw a broad-based decline, with industrials, energy, and financials leading the losses. Consumer discretionary stocks, on the other hand, bucked the trend and closed higher.
At the close of trading, the Dow Jones Industrial Average had fallen by approximately 268 points to 43,449.90. The S&P 500 and Nasdaq Composite also ended the day lower, declining by 0.39% and 0.32%, respectively.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.32% | 20,109.06 |
| S&P 500 | -0.39% | 6,050.61 |
| Dow Jones | -0.61% | 43,449.90 |
| Russell 2000 | -1.18% | 2,334.08 |
Insights From Analysts
The Dow Jones Industrial Average index last saw a nine-day fall for the first time since February 1978, according to FactSet data. However, the index has seen steeper crashes in a single day as compared to the cumulative erosion it has witnessed over these nine days.
Dow Jones has fallen nearly 3.47% to 43,449.90 points over the last nine days since Dec. 4, when it was at 45,014.04 points.
“Since 1900, I see 267 times it lost more than 3.47% in a single day,” said Ryan Detrick, chief market strategist at Carson Research.
According to BlackRock, the global economy is undergoing a transformation that could keep shifting the long-term economic trend. They suggest that investors should shift to distinct drivers of risk and return.
“That creates a wide range of potential outcomes and a need to use scenarios to guide portfolio construction, we think. Government bonds have become a less reliable cushion against risk asset selloffs in this new regime. So investors should consider new diversifiers like gold and bitcoin – not to replace bonds, but to get exposure to distinct drivers of risk and return.”
“We see the AI buildout and adoption creating opportunities across sectors,” BlackRock’s note added.
“Overall, with so much uncertainty around tariffs and inflation, bond market volatility is unlikely to fade anytime soon,” said JPMorgan in their note.
“The week's economic data releases appeared to be enough for markets to solidify expectations for a rate cut at the upcoming Federal Reserve meeting,” said T Rowe Price in their weekly note.
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Upcoming Economic Data
Important data is slated to be released this week that will help investors determine the future course of action.
- On Wednesday, housing starts, and building permit data for November will be announced at 8:30 a.m., ET.
- The FOMC’s interest rate decision will be announced at 2:00 p.m., ET, and the Fed Chair Jerome Powell’s press conference will begin at 2:30 p.m., ET.
Stocks In Focus:
- Parazero Technologies Ltd PRZO was up 71.24% in premarket trading after it regained Nasdaq compliance.
- Nukkleus Inc NUKK gained 45.37% after the company announced it acquired a 51% controlling stake in Star 26 Capital.
- Corvus Pharmaceuticals Inc CRVS rose 17.73% in premarket after it said that it would report interim data from its Phase 1 clinical trial evaluating Soquelitinib in patients with moderate to severe atopic dermatitis, on Dec. 18.
- Applied DNA Sciences, Inc APDN fell 13.04% in pre-market trading after reporting weak quarterly sales.
- Quantum Computing Inc QUBT was up 13.28% after it received a NASA contract doe Goddard Space Flight Center to use its entropy quantum optimization machine to help the space agency’s imaging.
- Investors are awaiting earnings results from General Mills, Inc. GIS, Jabil Inc. JBL )) and Micron Technology, Inc. MU today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures were lower in the early New York session by 0.03% to hover around $70.08 per barrel.
The gold spot index rose by 0.08% to $2,664.21 per ounce. The dollar index was up 0.04% to 106.997 level.
Asian markets were mixed on Wednesday, as Hong Kong’s Hang Seng, China’s CSI 300, and South Korea’s Kospi index advanced. Whereas, Japan’s Nikkei 225, India’s S&P BSE Sensex, and Australia’s ASX 200 index declined. Most European markets advanced.
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