January 28, 2023

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Stock futures are steady as investors await the Federal Reserve's rate hike decision on Wednesday

Stock futures are steady as investors await the Federal Reserve’s rate hike decision on Wednesday

Stock futures were flat on Tuesday night as investors await the Federal Reserve’s latest rate hike decision in its efforts to crush inflation, due for delivery on Wednesday.

Dow Jones Industrial Average futures rose 4 points, or 0.01%. Futures related to the S&P 500 and Nasdaq 100 rose 0.01% and fell 0.02%, respectively.

Stocks rose For the second day during regular trading on Tuesdays, it is fueled by a The inflation report is cooler than expected. The consumer price index for November was 7.1% over the year, less than the 7.3% increase expected by economists polled by Dow Jones. The 0.1% increase from the previous month was also below expectations.

The signal that inflation may have peaked was positive for stocks because it means the Fed may be one step away from stopping raising interest rates or turning to cuts, which could fuel stocks.

On Wednesday, the central bank will wrap up its December meeting and deliver its latest rate hike. Investors are largely expecting a 50 basis point increase — or half a percentage point — a smaller bump after four straight 75 basis point hikes. A basis point is one percent.

Chairman Jerome Powell will also speak on Wednesday, providing more clues about what’s to come from the Fed in 2023. In earlier meetings this year, traders have been sensitive to Powell’s language, interpreting his tone as hawkish or dovish.

“Obviously the market thinks there’s going to be a pivot or pause, that’s what we saw today,” Steve Grasso, CEO of Grasso Global, said on CNBC’s “Fast Money.” “if [Powell] Put a wet cap on it, the market will sell.”

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The Fed’s meeting is the last of the year. The next meeting of the central bank is scheduled to run from January 31 to February 1, 2023.