To The Moon

U.S. stock index futures inched higher on Wednesday over expectations the Federal Reserve could pause its monetary tightening campaign, though concerns over rates staying higher for longer kept investors on edge.

The U.S. central bank is expected to maintain its key rate in the range of 5.25%-5.50% as it concludes its meeting at 2 p.m. ET, with investors focused on economic projections and Chair Jerome Powell's comments for clues on the outlook for rates and inflation.

Market Snapshot

At 7:45 a.m. ET, Dow e-minis were up 94 points, or 0.27%, S&P 500 e-minis were up 10.75 points, or 0.24%, and Nasdaq 100 e-minis were up 28.75 points, or 0.19%.

Pre-Market Movers

Nio (NIO) - Shares of Nio Inc. bounced 2.9% in premarket trading Wednesday, a day after they suffered their worst day in four years, and their third-worst day since going public in September 2018, in the wake of the China-based electric vehicle maker’s announcement of a $1 billion convertible bond offering.

Instacart (CART) - Instacart was falling 4.5% to $32.20 in premarket trading after the online grocery-delivery company closed Tuesday with a gain of 12% to $33.70 in its trading debut. The stock had opened 40% above its initial public offering price of $30 and peaked at $42.95 before paring gains into the close.

Pinterest (PINS) - Pinterest rose 4% to $27.25 after executives, speaking at the social-media company’s first investor day, said they expect a compound annual growth rate over the next three to five years in the mid- to high teens, compared with guidance in the high single digits for the third quarter. The stock was upgraded to Buy from Neutral at D.A. Davidson and the price target was boosted to $35 from $25.

Western Digital (WDC) - Kioxia Holdings Corp.’s lenders plan to submit a commitment letter in October for the refinancing of ¥2 trillion ($14 billion) in loans to help fund the merger with Western Digital Corp.’s flash memory business that’s still under discussion, according to people familiar with the matter. Western Digital shares gained 3.7% in premarket trading.

Nikola (NKLA) - Nikola stock dropped another 3% in premarket trading Wednesday after waving violently Tuesday. Nikola stock climbed double-digits Monday after the electric truck start-up announced a new addition to its leadership team. While the shares fluctuated sharply on Tuesday, dropping more than 14% at one point and ultimately closing down 2.5%.

ARS Pharmaceuticals (SPRY) - ARS Pharmaceuticals announced late Tuesday that the FDA declined to approve its epinephrine nasal spray, neffy, as a treatment for allergic reactions (Type I) such as anaphylaxis in adults and children. ARS Pharmaceuticals shares tumbled 60% in premarket trading Wednesday.

Avinger (AVGR) - Avinger stock jumped another 4% in premarket trading Wednesday on a new medical device launch. The stock has risen 153% in the previous two trading days.

Cheche (CCG) - Cheche shares rallied 10% in premarket trading Wednesday after tumbling 57% Tuesday. Cheche stock has fluctuated sharply recently after completing its special purpose acquisition company (SPAC) merger with Prime Impact Acquisition I.

General Mills (GIS) - General Mills exceeded analysts' expectations for quarterly sales on Wednesday, as price hikes on its breakfast cereals, snack bars and pet food products helped cushion a blow from slowing demand. The shares rose 0.8% in premarket trading.

Ford Motor (F) - Ford was up 0.4% after Unifor, the union representing Ford’s Canadian autoworkers, reached a tentative deal with the U.S. auto maker with just hours to go before an 11:59 p.m. ET Tuesday strike deadline. The agreement covers 5,600 workers at Ford’s Canadian plants. American auto workers at Ford, General Motors, and Stellantis remain on strike with the United Auto Workers union threatening to broaden the strike if negotiating progress isn’t made by Friday.

Goldman Sachs (GS) - Goldman Sachs is in advanced talks to sell specialty lender GreenSky to a group of investment firms, The Wall Street Journal reported, citing people familiar with the matter. A deal would be worth about $500 million, the people told the Journal, less than one-third of what Goldman paid for the business. Goldman closed the acquisition of GreenSky in March 2022. Goldman shares rose slightly.

Intel (INTC) - Intel rose 0.1% in premarket trading after slumping 4.3% in the previous session. The stock was the worst performer in the Dow Jones Industrial Average on Tuesday after the chip maker issued some cautionary comments on data center chip demand in a meeting with analysts connected with the Intel Innovation customer event. Chief Financial Officer David Zinsner said channel inventory of data center processors was taking longer to clear than it did for the company’s PC processor business. He said Intel was finding the recovery in the data center business to be “a little bit more delayed.” 

Bird Global (BRDS) - Bird Global shares dropped 22% in premarket trading Wednesday after soaring Tuesday. Shares of Bird Global jumped 104% on Tuesday after the company said it would acquire the operator behind Spin scooters for $19 million.

Dollar General (DG) - Dollar General declined 1.8% to $113 after shares of the discount retailer wee downgraded to Underweight from Neutral at J.P. Morgan. The price target was reduced to $116 from $132.

Steelcase (SCS) - Steelcase rose 3.4% after the furniture company said it expects “significantly improved” adjusted fiscal-year earnings as more companies issue return-to-office mandates, adding that it sees demand levels improving “as customers seek our help to evolve their workplaces to engage, connect and work better for their employees.”

nCino (NCNO) - Shares of nCino fell 5.1% to $31.41 after Morgan Stanley downgraded the financial-technology company to Underweight from Equal Weight with an unchanged price target of $24.

Zebra Technologies (ZBRA) - Zebra Technologies was down 3.1% to $244.39 after it also was downgraded to Underweight from Equal Weight at Morgan Stanley.

Market News

Fed Set to Pause Rate Hikes, But Don't Count Out Another Increase

The Federal Reserve is expected to pause its interest-rate hikes Wednesday for the second time this year following a slowing in inflation while leaving the door open for another increase as early as November.

The Federal Open Market Committee will keep rates steady at its Sept. 19-20 meeting in a range of 5.25% to 5.5%, a 22-year high. The rate decision and committee forecasts will be released at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later.

Powell has signaled that Fed leaders would prefer to wait to evaluate the impact of past increases on the economy as they near the end of their rate-hiking campaign. With inflation still well above the committee’s 2% target and the US economy resilient, officials may pencil in one more hike in their quarterly projections.

Goldman Raises Brent Oil Forecast to $100 as Rally Builds

Goldman Sachs Group Inc. has rejoined the $100-a-barrel oil club, raising its forecast for crude back to triple digits as demand booms and OPEC+ supply curbs tighten the market.

With prices rising more than 30% since mid-June to breach $95 a barrel on Tuesday, the Wall Street bank pushed up its 12-month forecast for global benchmark Brent to $100 from $93. However, most of the rally “is behind us,” the bank said in a note.

Marketing Firm Klaviyo Prices IPO Shares at $30 Each

Marketing and data automation provider Klaviyo Inc. priced its initial public offering above a marketed range to raise $576 million in the third major US listing in a week.

Klaviyo and a group of its current investors sold 19.2 million shares Tuesday for $30 each, after marketing them for $27 to $29 each. At the IPO price, the Boston-based company has a fully diluted value of about $9 billion.

The offering is being led by Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc. Klaviyo’s shares are expected to begin trading Wednesday on the New York Stock Exchange under the symbol KVYO.

Justice Department Probe Scrutinizes Elon Musk Perks at Tesla Going Back Years

Federal prosecutors are scrutinizing personal benefits Tesla may have provided Elon Musk since 2017—longer than previously known—as part of a criminal investigation examining issues including a proposed house for the chief executive.

The U.S. Attorney’s Office for the Southern District of New York also has sought information about transactions between Tesla and other entities connected to the billionaire, people familiar with the investigation said. Prosecutors have referenced the involvement of a grand jury.

The new information indicates that federal prosecutors have a broader interest in the actions of Musk and Tesla than was previously known and that they are pursuing potential criminal charges. The Wall Street Journal reported last month that the Justice Department is investigating Tesla’s use of company resources on a secret project that was described internally as a house for Musk.