Wall Street Likely To Open Flat As Investors Await Fed Policy

Futures point to a flat start on Wall Street Wednesday morning. With the focus on the Federal Reserve’s monetary policy announcement due later in the day, investors are likely to make cautious moves.

The Federal Reserve is scheduled to announce its monetary policy at 2 pm ET. The accompanying statement from the Fed, and Fed Chair Jerome Powell’s subsequent press conference are set to make a significant impact on market’s movements.

Data on retail sales for the month of November, import & export prices for November, and a reading of NY Empire State Manufacturing Index are all due at 8:30 am ET.

With inflation remaining at an elevated rate, the Fed is widely expected to accelerate its timetable for reducing bond purchases. There are also expectations that the central bank will start raising interest rates after bringing its asset purchase program to a halt.

Investors are also likely to closely follow the news about the Omicron variant of the coronavirus. Several countries, including the U.S., are seeing a surge in new cases of the latest variant.

The World Health Organization’s warning that existing vaccines may be less effective against infection and transmission linked to the Omicron variant may weigh on sentiment.

Despite coming off the session’s lows, U.S. stocks closed on a weak note Tuesday as concerns about the outlook for monetary policy weighed on the markets.

The major averages all ended on a negative note. The Dow dipped 106.77 points or 0.3 percent to 35,544.18, the Nasdaq tumbled 175.64 points or 1.1 percent to 15,237.64 and the S&P 500 slid 34.88 points or 0.8 percent to 4,634.09.

Asian stocks turned in a mixed performance on Wednesday amid concerns about the potential impact of the new Covid-19 variant Omicron on travel. Investors also braced for a faster withdrawal of Federal Reserve stimulus. Signs of slowing Chinese growth and U.S.-China tensions also kept underlying sentiment cautious.

European stocks are up in positive territory amid cautious moves by investors ahead of the Federal Reserve’s monetary policy announcement. The Bank of Japan, the Bank of England and the European Central Bank are also scheduled to announce their monetary policy decisions this week.

In commodities trading, West Texas Intermediate Crude oil futures for January are down $0.74 or 1.05 percent at $69.98 a barrel. Gold futures are lower by $2.80 or 0.16% at $1,769.40 an ounce.

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