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U.S. Futures Lower; Tech Earnings and Fed Meeting in Focus

Published 01/27/2021, 07:01 AM
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By Peter Nurse   

Investing.com - U.S. stocks are seen trading lower Wednesday, with investors focusing on the tech sector as a number of household names report earnings and the Federal Reserve’s latest policy meeting.

At 7:05 AM ET (1205 GMT), the Dow Futures contract was down 226 points, or 0.7%, S&P 500 Futures traded 28 points, or 0.7%, lower, and Nasdaq 100 Futures dropped 15 points, or 0.1%. 

The tech-heavy Nasdaq Composite is likely to outperform Wednesday, after software giant Microsoft (NASDAQ:MSFT) reported a 17% increase in revenue in its fiscal second quarter on a year-on-year basis. Additionally, the company reported its Azure cloud computing services grew 50%, pleasing investors who see this segment as key to the company’s future success.

Earnings from the crucial tech sector continue Wednesday, with investors no doubt hoping Microsoft’s solid numbers reflect well on Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Tesla (NASDAQ:TSLA), who are all scheduled to report after the closing bell.

Aside from these tech big names, the likes of AT&T (NYSE:T), Abbott Labs (NYSE:ABT), Boeing (NYSE:BA), General Dynamics (NYSE:GD) and Corning (NYSE:GLW) are due to report before the opening bell. 

The GameStop (NYSE:GME) saga is set to continue Wednesday. The company’s stock has continued to soar premarket in volatile trading, with retail investors emboldened by a tweet from CEO founder Elon Musk linking to a popular Reddit discussion thread. 

Investment firm Melvin Capital has announced that it had closed out its short position in GameStop. Short sellers in the stock are down $5 billion on a mark-to-market, net-of-financing basis in 2021, according to analytics firm S3 Partners. 

Also of note Wednesday is the conclusion of the latest two-day meeting of the Federal Reserve, at 2 PM ET (1900 GMT), its first under the Biden administration. The central bank is not expected to alter its stance on rates or asset purchases, and is likely to recommit to a highly accommodative policy stance.

Fed Chairman Jay Powell is expected to offer more insights on the progress of the recovery and the Fed’s view on growth for this year.

The key economic release Wednesday is durable goods orders for December, with growth expected to slow to 0.9% from 1.0% in November.

Oil prices climbed Wednesday, boosted by industry data showing U.S. crude stockpiles fell unexpectedly last week.

Data from the American Petroleum Institute, released Tuesday, showed a draw of 5.272 million barrels for the week ending Jan. 22, compared with a forecast for a 603,000-barrel build. The U.S. Energy Information Administration data are due later Wednesday.

U.S. crude futures traded 0.1% higher at $52.62 a barrel, while the international benchmark Brent contract rose 0.1% to $55.71. 

Elsewhere, gold futures fell 0.7% to $1,837.30/oz, while EUR/USD traded 0.4% lower at 1.2116.

 

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