- After a great start to the year for equities on expectations the Federal Reserve may indicate a slowdown in the pace of rate hikes, US equity futures declined on Wednesday as traders prepared for the Federal Reserve policy meeting.
- After the Nasdaq surged more than 10% in a January bounce that had not been witnessed in more than two decades, futures on the S&P 500 and Nasdaq 100 were both down roughly 0.4%. With a gain of 8.6% in the previous month, a global stock index that excludes the US set a new record for the best year-to-date performance.
- Equity markets are poised for a confrontation with the Fed as traders prepare for a shift that Fed head Jerome Powell and his colleagues might not be able to deliver as a result of the rally. Although the Fed's rate hikes over the past year have started to slow inflation, still-loose financial conditions are making the central bank's job more difficult. Wage cost data that fell short of predictions, a cooling housing market, and declining consumer confidence all point to this.
