Dow Futures Fall 110 Pts; Fed Policy, Biden's Trip to Europe in Focus By

© Reuters

By Peter Nurse  

-- U.S. stocks are seen opening marginally lower Wednesday, as investors continue to digest the recent moves by the Federal Reserve ahead of U.S. President Joe Biden’s trip to Europe to discuss further sanctions on Russia.

At 7:10 AM ET (1110 GMT), the Dow Futures contract was down 110 points, or 0.3%, S&P 500 Futures traded 17 points, or 0.4%, lower and Nasdaq 100 Futures dropped 85 points, or 0.6%.

The three main indexes on Wall Street closed higher Tuesday, with the Dow Jones Industrial Average climbing over 250 points, or 0.7%, the S&P 500 rising 1.1% and the Nasdaq Composite gaining 2%.

The Federal Reserve raised the benchmark lending rate by a quarter point at its meeting last week, the first increase since December 2018, and Chairman Jerome Powell pointed Monday to more aggressive moves in the future in order to combat soaring inflation.

San Francisco Federal Reserve President Mary Daly, normally seen as leaning towards the dovish end of the spectrum, added her voice Tuesday to those calling for the Fed to raise interest rates quickly.

Russia’s ongoing war with Ukraine and the associated sanctions have exacerbated already high energy and commodity prices, adding to the concerns the U.S. central bank has over domestic inflation. 

President Joe Biden travels to Europe Wednesday to meet with allies of the North Atlantic Treaty Organization and European Union to discuss the West’s response to Russia, amid expectations that further measures to punish Moscow are likely.

The war in Ukraine continued to rage on Wednesday, with Russian troops continuing to bombard the capital Kyiv, Chernihiv, and the Black Sea port of Mariupol.

Back in the U.S., the economic data slate centers around the release of new home sales data from February, at 10 AM ET.

In the corporate sector, Adobe (NASDAQ:ADBE) stock slipped premarket after the software giant beat its first quarter targets, but disappointed with its guidance, while BuzzFeed (NASDAQ:BZFD) stock is still ticking up in the wake of its decision to close its loss-making newsdesk.

Chinese social media and gaming giant Tencent Holdings (OTC:TCEHY) posted an 8% rise in fourth quarter revenue, its slowest growth since going public in 2004, while results are due from General Mills (NYSE:GIS) and Cintas (NASDAQ:CTAS). 

Oil prices edged higher Wednesday after industry data pointed to another drop in U.S. crude inventories, while European countries continue to debate sanctions on Russian energy exports.

Tuesday’s numbers from the American Petroleum Institute showed crude stocks in the U.S., the world's biggest oil consumer, fell by 4.3 million barrels last week, confounding expectations for a small increase. 

The official government data from the U.S. Energy Information Administration is due later in the session. 

By 7:10 AM ET, U.S. crude futures traded 2.7% higher at $112.19 a barrel, while the Brent contract rose 2.7% to $118.62.

Additionally, gold futures rose 0.61% to $1,932.50/oz, while EUR/USD traded 0.2% lower at 1.1003.

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