Wednesday July 27th


Stock futures rise ahead of key Fed decision, Microsoft and Alphabet pop after earnings

U.S. stock index futures climbed on Wednesday morning, boosted by strong gains from Google-parent Alphabet and Microsoft, as traders await the Federal Reserve’s latest interest rate decision, scheduled for later in the day.

Futures on the Dow Jones Industrial Average rose by 162 points, or 0.5%. S&P 500 futures gained 1%, and Nasdaq 100 futures increased 1.6%.

Alphabet shares rose nearly 4% premarket after the tech giant’s quarterly report showed strong revenue from Google’s search business. That said, the company’s overall earnings and revenue came in below expectations.

Microsoft popped 3.7% even after the company’s earnings and revenue came in below analyst estimates.

Enphase Energy also popped on the back of its latest results, trading 9.7% higher. Chipotle also added 8% following its mixed second-quarter earnings release. Boeing rose about 3% even though its second quarter results fell short of analysts’ estimates as the company posted positive operating cash flow and stuck to its forecast to return to free cash flow in this year. There are more major earnings reports to come. On Wednesday, Qualcomm, Ford and Meta Platforms will report at the end of the day. More than 150 S&P 500 companies have reported calendar second-quarter earnings thus far. Of those names, roughly 70% have beaten analyst expectations, FactSet data shows. Investors are also awaiting a key announcement from the Federal Reserve. The central bank will announce its latest interest rate decision on Wednesday afternoon. Markets widely expect a three-quarter percentage point increase in the benchmark rate. “With so many moving parts to consider, we expect markets to remain volatile after the FOMC meeting,” wrote Mark Haefele of UBS Global Wealth Management. “With the markets anticipating a 3.3% fed funds rate by year-end, this means that after this week’s meeting, there may be around 100bps of rate hikes by end-December. But the pace of hikes remains uncertain.” Real estate stocks in Hong Kong dropped as Asia-Pacific markets traded mixed on Wednesday. Australia’s inflation rose and investors looked forward to the Fed’s policy decision. Hong Kong’s Hang Seng index fell 1.13% to 20,670.04, and the Hang Seng Tech index slipped 1.3%. Elsewhere in Asia, the Nikkei 225 in Japan gained 0.22% to 27,715.75, while the Topix index was 0.13% higher at 1,945.75. Mainland China markets were mildly lower. The Shanghai Composite declined around 0.05% to 3,275.76 and the Shenzhen Component lost 0.07% to 12,399.69. Oil rose by $1 a barrel on Wednesday as a report of lower inventories in the United States and cuts in Russian gas flows to Europe offset concern about weaker demand and a looming U.S. interest rate hike. Industry group the American Petroleum Institute said on Tuesday crude stocks fell by 4 million barrels, four times the forecast decline. The Energy Information Administration’s official figures are out at 1430 GMT. “Coupled with the Fed decision on interest rates, today is sure to be a heavy U.S.-centric session,” said Stephen Brennock of oil broker PVM. Brent crude rose 91 cents, or 0.9%, to $105.31 a barrel. U.S. West Texas Intermediate (WTI) crude gained $1.16, or 1.2%, to $96.14. Gold prices rose on Wednesday, buoyed by a softer U.S. dollar, though prices were range-bound as investors were cautious ahead of the U.S. Federal Reserve’s policy decision later in the day. Spot gold was up 0.27% to $1,721.69per ounce. U.S. gold futures rose 0.12% to $1,719.8.