By Investors Hub
The major U.S. index futures are pointing to a higher opening on Wednesday, with stocks likely to add to the gains posted in yesterday?s volatile session.
Traders may once again look to pick up stocks at reduced levels after the markets were unable to sustain the initial upward move in the previous session.
The major averages managed to end Tuesday?s trading in positive territory, although many sectors extended recent sell-offs.
The markets may also benefit from optimism the Federal Reserve will strike a more dovish tone in its announcement of its latest monetary policy decision this afternoon.
The Fed is widely expected to raise interest rates by a quarter point, but traders will closely scrutinize the central bank?s accompanying statement and forecasts for clues about future rate hikes.
Ahead of the announcement, President Donald Trump has been urging the Fed to refrain from its gradual pace of raising rates.
?Don?t let the market become any more illiquid than it already is,? Trump told the Fed in a post on Twitter on Tuesday. ?Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!?
While the Fed will not want to be seen as bowing to political pressure, the central bank may still signal a slower pace of rate hikes due to recent disappointing economic data, low inflation, and concerns about the ongoing trade dispute between the U.S. and China.
After failing to sustain an early move to the upside, stocks continued to experience substantial volatility over the course of the trading day on Tuesday. The major averages fluctuated wildly as the day progressed before closing in positive territory.
The S&P 500 hit its lowest intraday level in over a year but ended the up just 0.22 points or less than a tenth of a percent at 2,546.16. The Dow rose 82.66 points or 0.4 percent to 23,675.64 and the Nasdaq climbed 30.18 points or 0.5 percent to 6,783.91.
The initial strength on Wall Street was partly due to bargain hunting, with traders picking up stocks at reduced levels on the heels of the sharp drop seen over the two previous sessions.
The pullback seen Monday afternoon pulled the Dow down to its lowest closing level in over eight months, while the Nasdaq and the S&P 500 dropped to their lowest closing levels in over a year.
The subsequent volatility came as traders remained on edge ahead of the Federal Reserve’s monetary policy announcement.
On the U.S. economic front, the Commerce Department released a report showing a substantial increase in U.S. housing starts in November, as a spike in multi-family starts more than offset a continued drop in single-family starts.
The Commerce Department said housing starts jumped by 3.2 percent to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million.
Economists had expected housing starts to edge down to a rate of 1.225 million from the 1.228 million originally reported for the previous month.
The report also said building permits surged up by 5.0 percent to an annual rate of 1.328 million in November from the revised October rate of 1.265 million.
Building permits, an indicator of future housing demand, had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.
Gold stocks showed a substantial move to the upside over the course of the session, driving the NYSE Arca Gold Bugs Index up by 2.3 percent. With the jump, the index reached a four-month closing high.
The rally by gold stocks came amid a modest increase by the price of the precious metal, with gold for February delivery rising $1.80 to $1,253.60 an ounce.
Housing stocks also saw considerable strength on the heels of the housing starts data, moving notably higher along with computer hardware and semiconductor stocks.
On the other hand, energy stocks moved sharply lower amid a steep drop by the price of crude oil. Crude for January delivery plunged $3.64 to a fifteen-month closing low of $46.24 a barrel amid concerns about oversupply.
Oil service stocks turned in some of the energy sector’s worst performances, dragging the Philadelphia Oil Service Index down by 2.7 percent to its lowest closing level in fifteen years.
Tobacco stocks also extended a recent sell-off, while considerable weakness also emerged among biotechnology and banking stocks.
