Stock market news live updates: Stock futures drift higher ahead of Fed decision

Stock futures traded barely higher Tuesday night as traders regarded ahead to a key monetary policy decision from the Federal Reserve.

Contracts on the S&P 500 edged up. Earlier, the three main U.S. inventory indexes closed out the session decrease, with each the S&P 500 and Nasdaq pulling again from document highs logged earlier this week. 

Traders are anxiously awaiting the conclusion of the Federal Reserve’s newest financial coverage assembly, which can culminate with a coverage assertion Wednesday afternoon and a press convention from Federal Reserve Chair Jerome Powell. Both come at a crucial juncture within the U.S. financial restoration, with financial exercise accelerating and producing inflationary pressures that some market individuals consider might warrant a nearer-term shift to financial coverage than the central financial institution has at the moment telegraphed.

On Tuesday, new financial knowledge confirmed producer costs surged on the quickest year-on-year price on document, with inflationary pressures reverberating throughout the provision chain as demand picks up. The knowledge added to a spate of different readings corroborating these rising costs, with each the core client worth index and core private consumption expenditures at a close to 30-year excessive in May. 

“I do think this impulse of inflation, although transitory, is going to be much higher than the Fed and market participants are expecting right now. I’m expecting some more hotter inflation data, but ultimately those pressures ease as we get into 2022.” Jeff Schulze, funding strategist at ClearBridge Investments, told Yahoo Finance. He added he expects the Fed to start laying out a path towards tapering its asset buy program as quickly as August or September, however that precise tapering will probably not in the end start till subsequent yr. 

For now, the Federal Reserve has continued its quantitative easing with asset purchases going down at a price of $120 billion per 30 days and stored rates of interest close to zero, and has maintained that it believes inflation pressures will show transitory.

“The reopening of the economy has continued as COVID cases have dropped, and all the near-real-time indicators of economic activity have improved markedly,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a notice Tuesday. “Unemployment, however, remains elevated, despite some 3.5 million people still absent from the labor force, compared to the pre-COVID level.”

“The Fed, in short, is not yet in a position to declare that ‘substantial further progress’ — the test for beginning to taper its asset purchases — has been made,” he added. “The question for markets and Chair Powell [Wednesday], though, is whether sufficient progress-towards-progress has been made to allow the Fed to start talking about tapering.” 

6:20 p.m. ET Tuesday: Stock futures drift higher

Here’s the place markets had been buying and selling Tuesday night: 

  • S&P 500 futures (ES=F): 4,249.25, +2.75 factors (+0.06%)

  • Dow futures (YM=F): 34,306.00, +18 factors (+0.05%)

  • Nasdaq futures (NQ=F): 14,046.75, +16.5 factors (+0.12%)

NEW YORK, NEW YORK – MAY 11: People go to the Fearless Girl Statue in entrance of the New York Stock Exchange in Wall Street on May 11, 2021 in New York City. New York Governor Andrew Cuomo introduced pandemic restrictions to be lifted on May 19. (Photo by Noam Galai/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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