U.S. stock futures rose Wednesday after three consecutive sessions of losses, as investors awaited the Federal Reserve’s monetary-policy statement.
Dow Jones Industrial Average futures gained 69 points, or 0.4%, to 17076. S&P 500 futures advanced 11 points, or 0.5%, to 1976 and Nasdaq-100 futures added 21 points, or 0.5%, to 4104. Changes in stock futures don’t always accurately predict moves in the stock market after the opening bell.
Stock futures remained higher after data showed U.S. consumer prices fell 0.3% in November from October, posting the biggest one-month drop since December 2008. So-called “core” prices, excluding food and energy costs, rose 0.1%. Economists polled by The Wall Street Journal had forecast a 0.1% drop in overall prices and a 0.1% gain in core prices.
Fed officials are closely monitoring inflation as they determine when to raise interest rates. The Wall Street Journal’s Jon Hilsenrath has reported the Fed could drop its pledge to keep rates low for a “considerable time” at the December meeting. Still, some market participants remain worried that the slump in oil prices could weigh further on inflation and prompt the Fed to remain cautious, maintaining its pledge for low rates at this meeting.
Investors attributed premarket gains on Wednesday to a rebound after three sessions of losses and expectations that the Fed could remain dovish.
“It’s optimism that the Fed’s not going to drop the term ‘considerable time,’” said Kent Engelke, chief economic strategist at Capitol Securities Management, referring to gains in stock futures.
At 2 p.m. EST, the Fed will release its statement on monetary policy and publish new economic projections. This will be followed by Chairwoman Janet Yellen ’s press conference at 2:30 p.m.
Even when the Fed begins to lift short-term rates, it will do so gradually, leaving the central bank still largely accommodative, said Michael Arone, State Street Global Advisors’ chief investment strategist. That would be positive for stocks, he said.
Stocks have declined in recent sessions amid the continued drop in oil prices and turmoil in emerging-market assets. The Dow has fallen nearly 5% from its Dec. 5 record, through Tuesday’s close. Still, pullbacks in U.S. stocks have proved short-lived this year, with buyers emerging to snap up stocks at lower prices. Many investors say that improving economic data and broadly positive corporate earnings continue to paint a positive backdrop for stocks.
Stocks fell Tuesday for the third session in a row. The Dow fell 0.7% to 17068.87 and the S&P 500 declined 0.8% to 1972.74.
European stocks fell Wednesday, with the Stoxx Europe 600 down 0.6%.
Oil prices resumed their slide. Crude-oil futures fell 2.1% to $ 54.75 a barrel. Gold futures rose 0.3% to $ 1197.90 an ounce.
Demand for U.S. government debt waned, pushing the yield on the 10-year Treasury note up to 2.086%.
In corporate news, mining-equipment maker Joy Global Inc. reported fourth-quarter earnings that beat expectations. The company warned of challenges in 2015. Shares fell 1.7% premarket.
Write to Saumya Vaishampayan at firstname.lastname@example.org