Wall St set for higher open as markets gear up for Fed decision

Reuters

Wall St set for higher open as markets gear up for Fed decision

Dec 18, 2024 at 1:58 pm GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>US STOCKS-Wall St set for higher open as markets gear up for Fed decision</title></head><body>

For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.

Fed's rate decision expected at 2:00 p.m. ET

Birkenstock up after beating estimates for Q4 results

Merck gains after signing up to $2 bln obesity drug deal

Futures up: Dow 0.42%, S&P 500 0.30%, Nasdaq 0.22%

Updates before markets open

By Lisa Pauline Mattackal and Purvi Agarwal

Dec 18 (Reuters) - Wall Street's main indexes were poised for a higher open onWednesday, as investors were optimistic about theFederal Reserve's final rate decision of the year and awaitedsignals on whether policymakers will take a more cautious stance in 2025.

The Fed is widely expected to reduce interest rates by 25 basis points at its meeting. The announcement is expected at 2 p.m. ET on Wednesday.

With a rate cut broadly priced in, the Fed's summary of economic projections (SEP), which includes the "dot plot" of rate projections, and comments from Chair Jerome Powell will be in focus for indications on the rate path in 2025.

"The question is more about what happens next and what's the rhetoric around 2025. Powell's really guided markets in a pretty safe (way) and kind of kept them stable enough to continue the upward trajectory in 2022, and we expect today to be similar," said Keith Buchanan, senior portfolio manager, Globalt Investments.

"We expect two cuts in 2025, that's down from a few months ago. The market is starting to grapple with that happening."

Wall Street's main indexes had dipped in Tuesday's session, with the Dow notching its ninth straight daily decline, its longest losing streak since February 1978, as markets increasingly look for a more hawkish Fed next year on the back of strong growth and persistent inflation limiting the case for steady rate cuts.

U.S. Treasury yields have ticked higher with the change in Fed expectations, with the 10-year yield US10YT=RR up past 4.4%.

Most rate-sensitive megacap stocks ticked higher in premarket trading, with AI giant Nvidia NVDA.O up 2.5% after hitting an over two-month low on Tuesday.

Tesla TSLA.O, meanwhile, dropped 1.9% after rising over 14% in the last three sessions.

At 8:25 a.m. ET, Dow E-minis 1YMcv1 were up 181 points, or 0.42%, S&P 500 E-minis EScv1 were up 18 points, or 0.30% and Nasdaq 100 E-minis NQcv1 were up 48.75 points, or 0.22%.

Still, despite some jitters over future Fed policy, stocks are on track to end the year strong with the S&P 500 up nearly 27%, the Nasdaq up nearly 34% and the Dow up over 15%.

The rally has been fueledby technology companies that capitalized on the euphoria around artificial intelligence, the prospects of a lower rate environment and hope of pro-business policies from the incoming Donald Trump administration.

Crypto-focused stocks slipped as bitcoin BTC= fell 1.3%. MARA Holdings MARA.O and Riot Platforms RIOT.O down 1.2% each.

Birkenstock BIRK.N advanced 4.8%after beating market expectations for fourth-quarter results, helped by robust full-price sales of the footwear maker's pricey sandals in the U.S. and Asia.

Merck MRK.N gained marginally afterthe drugmaker signed a deal worth up to $2 billion with Hansoh Pharmaceuticals 3692.HK to develop and commercialize the Chinese biotech's experimental obesity drug.

General Mills GIS.N fell 4.4% as the Cheerios makerslashed its annual profit forecast, while Jabil JBL.N jumped 9.6% after the electronic components maker beat estimates for first-quarter results.

Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Maju Samuel

</body></html>