Stock futures rise ahead of Fed decision as oil prices decline: Live updates

Treasury yields moved lower Wednesday, backing off a day after the 10-year note hit its highest level in nearly 16 years and as the Federal Reserve was about to reveal its interest latest rate decision..

The benchmark note dropped more than 2 basis points early on, dipping to 4.341%. That move lower came a day after the 10-year hit its highest level since Nov. 7, 2007. A basis point equals 0.01%, with yields moving opposite price.

Other yields also fell, with the 2-year note, which is most sensitive to Fed moves, down nearly 4 basis points to 5.071%.

— Jeff Cox

Shares of General Mills rose 1% after the food products company reported fiscal first-quarter results that were slightly above Wall Street expectations.

The company generated $1.09 in adjusted earnings per share on $4.90 billion of revenue. Analysts surveyed by LSEG were expecting $1.08 per share on $4.88 billion of revenue. Net sales were up 4% year over year, even though sales in the pet category were flat.

General Mills reiterated its outlook for the 2024 fiscal year.

— Jesse Pound

Mortgage applications to purchase a home climbed 2% last week but were still 26% lower compared to the same period last year, according to the Mortgage Bankers Association’s seasonally adjusted index.

Rates on a 30-year fixed-rate mortgage conforming balances also climbed to 7.31% from 7.27%, while demand for home refinancing ticked up 13% compared to a week earlier.

— Brian Evans

Oil prices fell Wednesday, after reaching above $92 a barrel on Tuesday.

West Texas Intermediate Crude fell 0.6% to $90.60 as of 7:22 a.m. EDT. It had hit $93.74 on Tuesday, which was its highest level since Nov. 7, 2022.

Brent Crude also lost 0.6% to hit $93.78, down from its Tuesday high of $95.96.

— Hakyung Kim

U.S. Treasury yields dipped slightly on Wednesday, though the 10-year yield is still hovering around 16-year highs, as investors awaited the latest Federal Reserve interest rate decision and guidance for policy moves ahead.

At 4:19 a.m. ET, the yield on the 10-year Treasury was down by around one basis point to 4.3567%, trading at levels last seen in 2007. The 2-year Treasury was last more than two basis points lower at 5.0859%.

Yields and prices have an inverted relationship. One basis point equals 0.01%.

— Sophie Kiderlin

European markets opened cautiously higher on Wednesday as global investors await the latest monetary policy decision from the U.S. Federal Reserve.

The pan-European Stoxx 600 index opened 0.2% higher, with sectors spread across marginally positive and negative territory. Health-care stocks led gains with a 0.9% uptick, while oil and gas dipped 0.8%.

— Hannah Ward-Glenton

China left its one-year and five-year loan prime rates unchanged at 3.45% and 4.2% respectively for September.

The People’s Bank of China last cut the one-year LPR rates in August, lowering it to 3.45% from 3.55%, while the five-year LPR was last cut in June from 4.3% to 4.2%.

Hebe Chen, market analyst at IG International said “PBOC’s hold today highlights the dilemma that central bank keeps struggling with: to save the economy or save the yuan.”

As such, she thinks that the central bank’s “inconsistence” will persist, “due to the lack of a committed priority.”

The offshore yuan strengthened slightly to trade at 7.3028 against the greenback. The currency hit its all-time low just recently, at 7.3650 against the U.S. dollar on Sept. 8.

— Lim Hui Jie

Japan’s trade deficit fell 66.7% in August, coming in at 930.5 billion yen ($6.3 billion) compared with the 2.79 trillion yen deficit a year ago.

However, the trade deficit was still wider than the 659.1 billion yen expected by economists polled by Reuters.

Both imports and exports to the world’s third-largest economy fell 17.8% and 0.8% year-on-year respectively, lower than Reuters expectations of a 19.4% fall for imports and 1.7% drop for exports.

— Lim Hui Jie

South Korea’s producer price index rose 1% year on year in August, marking the first time the wholesale inflation rate has risen since July 2022.

This is higher than the 0.3% year-on-year gain recorded in July. On a month on month basis, the PPI gained 0.9% in August, compared with a 0.2% rise the month before.

Agricultural, forestry and marine products saw the largest rise in prices in August, with prices climbing 3.6% year-on-year and 7.3% month-on-month

The PPI measures the average change in price of goods and services sold by manufacturers and producers in the wholesale market.

— Lim Hui Jie

The Federal Reserve is widely expected to hold rates steady Wednesday, but the central bankers will give an update on their economic outlook with the summary of economic projections, which includes one key chart that traders will have an eye on.

The so-called “dot plot” that charts the projected move in the Fed funds rate and the press conference of Chair Powell will give investors a clue as to what happens in the November meeting and into 2024.

“I think that they will keep that bias towards higher rates in there and indicate that they are willing to raise the funds rate further if the data start to show that either inflation is not slowing as they expect it to, or if the labor market remains too tight,” said Gus Faucher, chief economist at PNC Financial Services Group.

Read more about the meeting here.

— Jeff Cox, Jesse Pound

Wednesday’s policy decision from the Federal Reserve will be the first since July 26, which happened early in the second-quarter earnings season.

And while the S&P 500 is down about 2.7% since that day, the earnings picture has largely held up. And that could help explain why stocks are holding up even as interest rates have started to climb again.

“The market’s resilient because of earnings. it pushes all of the other narrative and all of the other stories to the side for now,” Chris Hyzy, CIO at Merrill and Bank of America Private Bank, said Tuesday on “Closing Bell.”

— Jesse Pound

“[G]iven that inflation remains above target, the recent rise in oil prices creates a near-term headache for central banks, which they may well convey by toeing a hawkish line,” Simon MacAdam, senior global economist at Capital Economics wrote in a note to clients Tuesday entitled, “Higher oil prices not a game-changer for inflation.”

London-based Capital Economics doesn’t believe higher crude oil prices will pave the way for “a sustained rebound in inflation,” or that central banks in developed economies will react by pushing up interest rates or even keep them higher for longer solely due to the energy markets.

“[W]e do not believe that the recent increase in oil prices will cause central banks in advanced economies to respond with interest rate hikes. For oil prices to have a bearing on the outlook for monetary policy, central banks would probably need to see prices rise higher and for a sustained period against a backdrop of resilient activity and rising inflation expectations,” MacAdam said.

— Scott Schnipper

Futures were calm on Tuesday evening when trading reopened at 6 p.m. ET. Futures for the Dow, S&P 500 and Nasdaq 100 all moved by less than 0.1%.

— Jesse Pound