U.S. stock index futures traded higher on Tuesday, broadly supported on expectations the Federal Reserve could strike a dovish tone at its latest monetary-policy meeting.
At around 7 a.m. ET, Dow Jones Industrial Average futures indicated a gain of 128 points at the open. Futures on the S&P 500 and Nasdaq 100 also rose.
The Fed is set to kick off its two-day policy meeting later in the day. Market expectations for a rate hike are at zero, with most investors pricing in no change in policy. However, investors will look for clues on the Fed’s economic outlook.
The Fed is also expected to lower its interest rate forecasts — or “dot plots” — to show little or no further tightening in 2019. With global economic growth appearing to slow, most market participants anticipate the U.S. central bank to adopt a cautious tone.
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At its January meeting, the Fed indicated it will be “patient” in raising rates. That shift came after the central bank raised rates in December, sparking concern the Fed may be tightening too fast.
“My expectations are that the Fed will maintain their dovishness,” said Gregory Faranello, head of rates at Roberts & Ryan. “The eyes will be on the dot plot, so I expect some tempering there as well.”
“The one potential are of concern would be if the data was not cooperating with the pivot,” Faranello said. “When we look at what’s going on on a global basis, [Fed Chairman Jerome Powell] has pointed to the headwinds, and those headwinds are still there.”
On the data front, January factory orders numbers are due at 10 a.m. ET.
Meanwhile, on the earnings front, FedEx and Tencent Music are expected to report after the bell.
Source: cnbc.com | Original Link