Stocks may move to the upside in early trading on Wednesday as traders look ahead to the Federal Reserve's monetary policy announcement. The major index futures are currently pointing to a higher open for the , with the Dow futures up by 26 points.
Upward momentum may contribute to early strength among stocks, although trading activity is likely to be somewhat subdued ahead of the Fed's announcement.
The Fed is scheduled to announce its monetary policy decision at 2 pm ET, followed by Fed Chairman Jerome Powell's press conference at 2:30 pm ET.
While the Fed is widely expected to raise interest rates by a quarter point, traders are likely to pay close attention to the accompanying statement for clues about future rate hikes.
Likely reinforcing expectations for a rate hike, the Labor Department recently released a report showing a bigger than expected increase in producer prices in the month of May.
The Labor Department said its producer price index for final demand climbed by 0.5 percent in May after inching up by 0.1 percent in April. Economists had expected producer prices to rise by 0.3 percent.
Excluding food and energy prices, core producer prices rose by 0.3 percent in May after edging up by 0.2 percent in April. Core prices had been expected to show another 0.2 percent increase.
The report said the annual rate of producer price growth accelerated to 3.1 percent in May from 2.6 percent in April, reaching its highest level in over six years.
The annual rate of growth in core producer prices also ticked up to 2.6 percent in May from 2.5 percent in the previous month.
Stocks showed a lack of direction over the course of the trading session on Tuesday, with the major averages bouncing back and forth across the unchanged line. Despite the choppy trading, the tech-heavy Nasdaq reached a new record closing high.
The major averages eventually ended the session mixed. While the Dow edged down 1.58 points or less than a tenth of a percent to 25,320.73, the Nasdaq climbed 43.87 points or 0.6 percent to 7,703.79 and the S&P 500 rose 4.85 points or 0.2 percent to 2,786.85.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. China's Shanghai Composite Index and Hong Kong's Hang Seng Index slumped by 1 percent and 1.2 percent, respectively. However, Japan's Nikkei 225 Index bucked the downtrend.
Meanwhile, the major European markets have moved to the upside on the day. While the U.K.'s FTSE 100 Index has climbed by 0.5 percent, the German DAX Index and the French CAC 40 Index are both up by 0.3 percent.
In commodities trading, crude oil futures are falling $0.41 to $65.95 a barrel after rising $0.26 to $66.36 a barrel on Tuesday. Meanwhile, after sliding $3.80 to $1,299.40 an ounce in the previous session, gold futures are dipping $0.90 to $1,298.50 an ounce.
On the currency front, the U.S. dollar is trading at 110.55 yen compared to the 110.37 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1769 compared to yesterday's $1.1745.
by P2PNews Staff Writer