US equity futures experienced an upswing before Wednesday’s market opening, driven by traders bracing for the Federal Reserve's impending monetary policy announcement. In early trading, the Dow Jones Industrial Average futures saw an increase of 0.2%, while S&P 500 futures rose by 1.3%. Additionally, Nasdaq futures showed a significant uptick of 2.2%, signaling a positive sentiment among investors. The Federal Open Market Committee (FOMC), responsible for setting monetary policy in the United States, is scheduled to release its policy statement at 2 pm ET, a much-anticipated event that could influence market dynamics. In the commodities market, oil prices were on the rise.
The front-month global benchmark, North Sea Brent crude, noted a 3.2% increase, climbing to $80.58 per barrel. Meanwhile, West Texas Intermediate (WTI) crude in the US saw an even greater jump of 3.6%, reaching $77.44 per barrel, reflecting concerns about supply and ongoing geopolitical tensions. Moreover, private payrolls data, derived from the ADP Institute's employment report released at 8:15 am ET, indicated a rise of 122,000 jobs in July.
This uptick, although positive, fell short of June's revised figure of 155,000 and was below the Bloomberg compiled estimates of approximately 150,000. The Employment Cost Index (ECI), which serves as a key measure of inflation in labor costs, was released shortly after at 8:30 am ET. The report recorded a 0.9% increase in the second quarter, following a slightly higher first-quarter gain of 1.2%.
Analysts had previously estimated an increase of 1%, indicating persistent inflationary pressures in the job market. Looking ahead, the Pending Home Sales index, set for release at 10 am ET, is expected to show a rebound of 1.4% in June after a previous decline of 2.1% in May, highlighting fluctuations in the housing market amidst ongoing economic recovery efforts. Across global markets, Japan's Nikkei index closed 1.5% higher, reflecting investor confidence in the region.
Additionally, Hong Kong's Hang Seng index ended the trading session up by 2%, while China's Shanghai Composite index rose by 2.1%. In Europe, the UK's FTSE 100 index registered a 1.2% increase, and Germany's DAX index gained 0.6% during early afternoon trading. In terms of specific equity movements, shares of Advanced Micro Devices (AMD) rose by 8% in pre-market trading following the company’s impressive Q2 financial report, which exceeded analyst expectations.
Vistra (VST) shares surged by 15% after the company secured a crucial 20-year license extension from the Nuclear Regulatory Commission, allowing it to continue operations at the Comanche Peak Nuclear Power Plant. Conversely, some stocks faced downturns; Microsoft (MSFT) shares dipped by 2% after the company’s fiscal Q4 cloud revenue fell short of analysts’ forecasts, raising concerns about growth in their cloud segment.
Additionally, shares of Penumbra (PEN) dropped sharply by 15% following a disappointing revision of its 2024 revenue guidance issued by the company overnight. Overall, this day in equity markets reflects a landscape marked by optimism in some sectors while caution prevails in others as influential economic indicators are awaited..