Stock Futures Edge Higher as Traders Look to Fed: Markets Wrap

(Bloomberg) — US equity futures edged higher and the dollar strengthened as investors looked ahead to the Federal Reserve’s policy decision for greater clarity on the outlook for the economy and interest rates.

Futures on the S&P 500 slipped 0.2% while those on the Nasdaq 100 gained 0.3%, signaling a bounce from Tuesday’s losses. Technology stocks were led higher by Tesla Inc. which rose as much as 3.7% after the electric-vehicle maker received California’s approval to start carrying passengers. Cantor Fitzgerald upgraded its recommendation on the stock which has slid almost 45% this year.

Nvidia Corp. also advanced after CEO Jensen Huang promised a clearer payoff to customers. The shares had dropped 3.4% Tuesday.

Market gains are being held in check, however, by signs that President Donald Trump’s trade tariff policies are starting to weigh on economic growth and consumer sentiment. Authorities have also signaled they are not prepared to step in to support equity markets.

While the Fed is expected to hold interest rates steady, its quarterly dot plot should offer clues on the central bank’s thinking on the economy. Fed Chair Jerome Powell’s news conference will also be scrutinized for his views on the potential impact of the trade tariffs and how much support could be offered to the economy this year.

“Investors continue to search for a policy circuit breaker, either from the White House or the Fed,” said Robert Griffiths, an equity strategist at L&G Investment Management Ltd.

Griffiths noted the Fed’s dovish pivot in late-2019 had come after a 30% drop in the Nasdaq, a far steeper decline than the index has suffered this year. What’s more, the full impact of the tariffs on inflation and the economy remains unclear, implying “the Fed’s ability to act pre-emptively on this occasion is extremely limited,” he added.

Meanwhile, geopolitics are adding a fresh layer of worry, as the Gaza truce ended, Russia rejected Trump’s ceasefire proposal in Ukraine and Turkey ignited a selloff in its markets by detaining a key opposition figure. The lira plunged more than 10% to record lows and the main equity index dropped after the detention of Istanbul mayor Ekrem Imamoglu.

The Stoxx 600’s three-day winning streak stalled, with Turkey-exposed stocks such as BBVA SA and ING Groep NV posting losses. Haven assets remained in demand, sending gold prices to new record highs, while Bloomberg’s dollar index climbed 0.2%.