Dow futures climb nearly 300 points as China moves, Fed decision in the spotlight

U.S. stock futures on Wednesday pointed to an extension of the previous session’s rally, as traders wait for the Federal Reserve’s monetary policy decision and react to China’s statement of support for its markets.

What’s happening
  • Futures on the Dow Jones Industrial Average
    YM00,
    1.18%

    rose 396 points, or 1.2%, to 33,821.

  • Futures on the S&P 500
    ES00,
    1.29%

    gained 1.3%, or 57 points, to 4,310.

  • Futures on the Nasdaq-100
    NQ00,
    1.80%

    rose 1.9%, or 255 points, to 13,705.

On Tuesday, the Dow
DJIA,
1.82%

rose 599 points, or 1.82%, to 33544, the S&P 500
SPX,
2.14%

increased 89 points, or 2.14%, to 4262, and the Nasdaq Composite
COMP,
2.92%

gained 367 points, or 2.92%, to 12949.

What’s driving markets

U.S. stock futures pointed to fresh gains on Wednesday, with the spotlight squarely on Federal Reserve monetary policy.

Meanwhile, China on Wednesday announced a far-reaching change to its policy stance, saying it would support its economy with monetary policy, attempt to limit the negative economic impact from policy changes, and work with U.S. regulators over delisting concerns. The statement sent Hong Kong-listed tech giants including Alibaba
BABA,
-1.29%

and Baidu
BIDU,
-0.54%

soaring and the Hang Seng Index closed up 19%.

Traders also were hopeful of diplomatic talks between Russia and Ukraine to end the war. A Russian negotiator said Ukraine has proposed having a smaller and non-aligned military. Ukrainian President Volodymyr Zelenskyy will address the U.S. Congress on Wednesday.

In the U.S., the Fed has all but promised a quarter percentage point interest rate increase, with market attention focused on projections of future rate rises, comments on its balance sheet strategy and the news conference with Fed Chair Jerome Powell.

Eddy Elfenbein, portfolio manager of the AdvisorShares Focused Equity ETF, expects volatile markets to continue as long as the S&P 500 is trading below its 50-day average, which on Tuesday was 4454. “Rates are going higher and the market’s focus is changing. Since November, low volatility stocks have been back in favor. This trend will probably last for several months,” he said.

Which companies are in focus?
  • Shares of coffee-maker Starbucks
    SBUX,
    4.83%

    were in focus after it announced the return of company founder Howard Schultz as CEO on an interim basis, as Kevin Johnson, who has lead Starbucks for five years, plans to step down on April 4.