S&P 500 futures are swinging between gains and losses in premarket trading as traders wait for Fed Interest Rate Decision.
The rate is expected to stay unchanged, and the market will focus on Fed’s commentary. The key intrigue is whether Fed will signal that it is starting to think about reducing asset purchases.
The Fed has been consistently dovish, and it does not look ready for a change of tone despite the robust economic rebound. However, bond traders are a bit nervous ahead of Fed Interest Rate Decision, and Treasury yields are moving higher.
Today, the yield of 10-year Treasuries made an attempt to settle above 1.65% before pulling back below 1.64%. If Treasury yields continue to move higher, tech stocks may find themselves under some pressure.
Alphabet Shares Gain Ground In Premarket Trading While Microsoft Stock Declines
Alphabet has recently reported its quarterly results, easily beating analyst expectations on both earnings and revenue. The company’s board approved $50 billion in stock repurchases, and Alphabet’s shares are up by more than 4% in premarket trading.
Meanwhile, Microsoft‘s quarterly report did not provide support to the stock which is down by more than 2% in premarket trading. Microsoft has also beaten analyst expectations on both earnings and revenue, but it looks that traders had higher expectations.
The mixed reaction to Big Tech reports has clearly contributed to lack of direction in premarket trading for S&P 500 futures.
WTI Oil Continues To Move Higher As OPEC+ Confirms Previous Deal
WTI oil is currently trying to settle above $63.50 as traders cheer OPEC+ decision to keep the previous production plan intact.
OPEC+ noted that Saudi Arabia will gradually increase its production in May, June and July in order to adjust its production to levels seen before its voluntary supply adjustment of 1 million barrels per day (bpd).
Other OPEC+ members will also gradually increase production according to previous plans, so OPEC+ should ultimately increase production by 2 million bpd. The gradual return of supply serves as a bullish catalyst for the oil market, which continues to ignore the challenging situation with coronavirus in India.