Last Updated: 4:00 PM EST
Stock indices finished today’s trading session in the green after the Federal Reserve decided to keep interest rates unchanged at 5.5%, as expected. The Fed also said that a September rate cut is on the table but stated that more progress is needed before rate cuts can actually happen. Still, the central bank acknowledged that there has been progress towards its 2% inflation goal. As a result, The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 3.01%, 1.58%, and 0.24%, respectively.
There was also other economic news worth noting. In fact, Automatic Data Processing (ADP) released its Nonfarm Employment Change report, which came in worse than expected. In July, nonfarm employment increased by 122,000, whereas expectations were for an increase of 147,000.
In addition, the United States Chicago Purchasing Managers Index was put out by ISM-Chicago. This measures the economic health of the manufacturing sector in Chicago. An expansion is defined by a number that is greater than 50, whereas a reading that is lower is considered a contraction.
For July, the number came in at 45.3, which was higher than the expected 44.8 from forecasters but a decrease from last month’s report of 47.4. It’s worth noting that the Chicago PMI had been trending lower since its peak of 75.2 back in May 2021. In addition, this marks the eighth consecutive month where the manufacturing sector in Chicago has contracted.
Furthermore, the National Association of Realtors released its Pending Home Sales report, which measures the month-over-month change in the number of home sales that have yet to close but are contracted to be sold. This measure excludes homes that are newly constructed.
During June, Pending Home Sales increased by 4.8% compared to May, better than the expected 1.4% increase. This is after a 2.1% decrease in the previous report.
First Published: 5:07 AM EST
U.S. futures traded higher on Wednesday morning as investors braced for the Federal Reserve’s monetary policy decision, due today. Futures on the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were up by about 1.58%, 0.99%, and 0.44%, respectively, at 4:57 a.m. EST, July 31.
In yesterday’s session, the S&P 500 and the Nasdaq Composite indices were down 0.5% and 1.3%, respectively, due to a decline in the stock prices of chipmakers such as Nvidia (NVDA), Qualcomm (QCOM), Broadcom (AVGO), and Micron (MU). On the other hand, the Dow Jones index gained 0.5%.
In major stock market news, CrowdStrike (CRWD) declined about 9.7% on news that Delta Air Lines (DAL) could seek compensation for damages related to the global IT outage. Further, Merck (MRK) was down 9.8% despite reporting robust Q2 results.
On the economic front, investors are looking ahead to the Federal Open Market Committee’s (FOMC) decision on interest rates. Although the central bank is expected to keep the interest rate steady, any cues on the Fed’s future course will drive market movement. Further, Fed Chair Jerome Powell’s speech will take prime focus today as he will share insights into the U.S. economy’s health.
Coming to earnings releases, several companies, including Meta Platforms (META), Mastercard (MA), Boeing (BA), T-Mobile (TMUS), Etsy (ETSY), Qualcomm (QCOM), and Riot Platforms (RIOT), are slated to release quarterly results today.
Meanwhile, the U.S. 10-year treasury yield was down at the time of writing, floating near 4.14%. At the same time, WTI crude oil futures trended higher, hovering near $76.38 per barrel as of the last check.
Elsewhere, European markets opened higher on Wednesday as traders awaited the Eurozone’s key inflation data and the Fed’s monetary policy decision.
Asia-Pacific Markets Ended Higher on Wednesday
Asia-Pacific indices rallied today after the Bank of Japan raised the benchmark interest rate and disclosed a plan to taper its bond-buying program.
Hong Kong’s Hang Seng index was up 2.01%. Also, China’s Shanghai Composite and Shenzhen Component indices climbed higher by 2.06% and 3.37%, respectively. At the same time, Japan’s Nikkei and Topix indices closed up by 1.49% and 1.45%, respectively.
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