Stock futures were mixed Wednesday as tech stocks gained and investors
awaited the Federal Reserve's interest-rate decision.
A strong economy faces signs of a weakening labor market, as evidenced by recent payrolls and employment creation numbers, and this backdrop supports a wait-and-see approach by the Fed, KBRA said.
Money markets price in a 91% probability of unchanged interest rates, according to LSEG. A hike is almost fully priced for December.
"Patience should not be confused with complacency," said Amundi Investment Institute. In line with the market, Amundi expects the Fed to keep interest rates on hold.
"Admittedly, the labor market now looks less strong and market rates remain high," it said. "However, the inflation outlook has not changed, so the Fed still has accommodation to remove." Investors are also watching for the start of big tech earnings. Releases from big AI spenders Microsoft and Alphabet are expected after the close and will be scrutinized for signs that the companies' huge investments are turning into revenue.
Meanwhile, oil prices rose Wednesday as traders assessed renewed threats to Middle East energy supplies after Yemen's Houthi militants said they targeted Saudi Arabia's largest oil refinery.
Stocks to watch
Alphabet, Microsoft, FedEx and Ford are due to report results after markets close.
Robinhood slid over 8% in premarket trading after it reported declining profit that undershot Wall Street's expectations. Its crypto business also remains mired in a yearlong slump.
SK Hynix reported a tripling of quarterly net profit, sending its shares racing over 10% higher in Seoul. SK Hynix's American depositary receipts also jumped premarket.
UBS fell in Zurich after UBS's earnings missed analysts' forecasts. UBS said its profit gained year-on-year.
Watch For:
EIA Weekly Petroleum Status Report; U.S. FOMC interest rate decision and news conference; Bank of Canada Interest Rate Announcement; Alphabet 3Q earnings; FedEx 3Q earnings; Ford 3Q earnings; Microsoft 1Q earnings
Today's Top Headlines/Must Reads:
- AI Boom Drives a Jump in Lending, but Bankers Still Sound Cautious
- Elizabeth Warren Demands Answers From Anthropic on 'Existential' Risks
- Home Buyers Who Enjoyed Cheap Adjustable Mortgages Are Now Getting a Nasty Shock
MARKET WRAPS Forex:
The dollar rose to a two-week high against a basket of currencies as sentiment towards AI stocks recovered ahead of the Fed's policy decision.
The greenback's strength should persist even if Fed Chairman Kevin Warsh refrains from sending clear signals about further tightening in December at Wednesday's meeting, Commerzbank said.
The euro fell to a 17-month low against the dollar as the greenback strengthened and French fiscal concerns linger. Sterling turned modestly lower versus the euro and hit a 12-day low against the dollar as investors looked ahead to the U.K. budget.
Bonds:
Treasurys rose above 5% again on Wednesday in the run-up to the Fed's interest-rate decision later in the day.
Energy:
December Brent crude futures rose 1.9%, while December WTI futures gained 2%.
Metals:
Gold prices ticked lower as investors awaited the Fed's interest-rate decision.
"Markets are watching the outcome of the FOMC later today with no expectation of a hike but focus on whether commentary shifts to a more hawkish stance, and if there is any clarity on where rates head in 2027," MUFG said.
TODAY'S TOP HEADLINES
Elizabeth Warren Demands Answers From Anthropic on 'Existential' Risks
Sen. Elizabeth Warren is "deeply troubled" by risks Anthropic raised in its initial public offering paperwork this week and is demanding answers to a long list of questions before the artificial-intelligence giant goes public, according to a copy of a letter she sent the company Tuesday that was viewed by The Wall Street Journal.
UBS Profit Climbs as Asia, Americas Growth Boosts Inflows
UBS Group reported a rise in third-quarter net profit, boosted by higher inflows to its wealth-management platform from Asia and the Americas.
The Swiss banking group said net profit for the third quarter was $2.69 billion, up from $2.48 billion in the year-earlier period. The figure was lower than analysts' expectations of $2.71 billion, according to consensus estimates compiled by the bank.
Intesa Sanpaolo Gets European Central Bank Approval to Take Over Monte Dei Paschi
Intesa Sanpaolo said it received authorization from the European Central Bank to take control of Banca Monte dei Paschi di Siena, removing a key regulatory obstacle for the Italian bank's 31.4 billion euros ($34.93 billion) takeover offer.
The green light from the ECB grants approval for Intesa to hold a direct controlling shareholding in Monte dei Paschi, which is widely considered to be the world's oldest bank still in operation.
JPMorgan's Skyscraper on Park Avenue Estimated to Cost Around $6 Billion
JPMorgan's new skyscraper in Manhattan is hard to miss. It is the tallest occupied office building in the city and regularly shines with decorative lighting for special occasions such as the Fourth of July, King Charles III's birthday, and the New York Knicks championship.
But more than a year after its grand opening, the bank has been coy about the cost.
Oil Prices Rise as Houthi Militants Target Saudi Energy
Oil prices rose Wednesday as traders assessed renewed threats to Middle East energy supplies after Yemen's Houthi militants said they targeted Saudi Arabia's largest oil refinery.
December Brent crude futures rose 1.9% to $116.03 a barrel, while December West Texas Intermediate futures gained 2% to $101.91 a barrel.
AI Boom Drives a Jump in Lending, but Bankers Still Sound Cautious
At the end of a previous lending boom, back in 2007, then-Citigroup CEO Charles Prince famously said: "As long as the music is playing, you've got to get up and dance."
This time around, with artificial intelligence now a driving force, banks are definitely up and dancing. But they are also eyeing possible seats and listening more keenly for a pause in the music.
Global Government Bond Yields Rise Ahead of Fed Decision, U.K. Budget
Yields on U.S. Treasurys, eurozone government bonds and U.K. gilts rose in European morning trade on Wednesday, as investors focus on the Federal Reserve's interest-rate decision as well as the U.K. budget.
The 10-year Treasury yield increased 1.8 basis points to 5.010% and the 10-year German Bund yield rose 1.9 basis points to 3.370%, while the 10-year U.K. gilt yield was up 2.5 basis points at 5.366%, according to Tradeweb.
German Consumers Grow Slightly Gloomier on Lingering Inflation Concerns
Consumer confidence in Germany fell slightly as higher energy costs driven by the war in Iran continue to pile pressure on household finances.
Germany's consumer-climate index, published Wednesday by the Nuremberg Institute for Market Decisions and GfK, fell to minus 30.8 in its forecast for November, from minus 30.6 in October. This was in line with a forecast of economists polled last week by The Wall Street Journal.
U.S. Warns Gulf of Possible Short, Intense Renewal of Iran War After Midterms
DUBAI-The U.S. has told several Gulf Arab countries to be prepared for a short, intense military campaign after the U.S. midterm elections, people briefed on the conversations said.
The communications through diplomatic and military channels are among a growing number of indications that the U.S. and Israel are readying to launch a new round of heavy combat operations against Iran, risking a major escalation in hopes of degrading Tehran's strength and pushing it toward negotiations.
Trump and Talarico Offer Texas Split Screen With Dueling Rallies Just Miles Apart
LUBBOCK, Texas - The road to a Senate majority ran through the wide open plains of West Texas on Tuesday night, where President Trump rallied in support of Republican Senate candidate Ken Paxton, and his Democratic opponent James Talarico held an event just 3 miles away.
Both were making their final push to win voter support just one week out from the midterm elections.
Strike Vote by 250 Watchmen Puts Nation's Busiest Port Complex at Risk
Port employers in Southern California are warning of a possible strike at the nation's busiest container-port complex as soon as Nov. 1.
The Pacific Maritime Association said Tuesday that a union local that represents 250 watchmen across the ports of Los Angeles and Long Beach voted to authorize a strike. The walkout could begin at 5 p.m. PT Sunday if a deal isn't reached.
Early Israeli Results Show No Clear Winner in Key Election
TEL AVIV-Israeli Prime Minister Benjamin Netanyahu received a rebuke from Israeli voters Tuesday but retained enough support to set up a high-stakes showdown in the coming weeks over whether he will stay in office.
Partial results, which could still change significantly, showed Netanyahu's Likud party winning the greatest number of parliamentary seats, though fewer than his coalition currently holds in the Knesset. With about two-thirds of the votes counted early Wednesday morning, Netanyahu's coalition was still shy of a majority that would keep it in power though ahead of its rivals.
Write to priscila.barrera@wsj.com
TODAY IN CANADA Earnings:
Agnico Eagle 3Q Alamos Gold 3Q Algoma Steel 3Q Athabasca Oil 3Q Bausch+Lomb 3Q Bausch Health 3Q Cda. Packers 3Q CPKC Ltd. 3Q Cogeco Comm. 4Q Eldorado Gold 3Q First Quantum 3Q Foraco Intl. 3Q GFL Env. Inc. 3Q Kinross Gold 3Q Methanex Corp. 3Q NA Const. Grp 3Q West Fraser 3Q Whitecap Res. 3Q
Economic Indicators (ET):
0945 Bank of Canada interest rate announcement Stocks to Watch:
Power Corp Announces Additional Investment in Wealthsimple
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