Following the mixed performance seen in the previous session, stocks are likely to move mostly lower in early trading on Wednesday. Tech stocks appear poised to lead any early decline, with the Nasdaq futures tumbling by 150 points.
The downward momentum for the tech-heavy Nasdaq comes as treasury yields are once again spiking ahead of the Federal Reserve’s monetary policy announcement this afternoon.
The yields on ten-year notes and thirty-year bonds have jumped to their highest intraday levels in over a year, raising concerns about the outlook for interest rates.
While the Fed is widely expected to maintain its ultra-easy money policy, traders will be paying close attention to the central bank’s updated forecasts for the economy, inflation and interest rates.
Some traders are also hoping Fed Chair Jerome Powell will address the recent spike in treasury yields in his post-meeting press conference.
In U.S. economic news, the Commerce Department released a report showing a substantial decrease in new residential construction in the month of February.
The report said housing starts plummeted by 10.3 percent to an annual rate of 1.421 million in February after slumping by 5.1 percent to a revised rate of 1.584 million in January.
Economists had expected housing starts to decrease by 0.9 percent to a rate of 1.565 million from the 1.580 million originally reported for the previous month.
With the steep drop, housing starts continued to give back ground after reaching a fourteen-year high of 1.670 million in December.
The report also showed a much bigger than expected decrease in building permits, which plummeted by 10.8 percent to an annual rate of 1.682 million in February after spiking by 10.7 percent to a revised rate of 1.886 million in January.
Building permits, an indicator of future housing demand, had been expected to tumble by 7 percent to a rate of 1.750 million from the 1.881 million originally reported for the previous month.
After ending Monday’s trading firmly positive, the major U.S. stock indexes turned in a mixed performance during trading on Tuesday. While the tech-heavy Nasdaq edged higher, the Dow and the S&P 500 pulled back off Monday’s record closing highs.
The Nasdaq gave back ground after jumping as much as 1.2 percent but still ended the day up 11.86 points or 0.1 percent at 13,471.57. Meanwhile, the Dow fell 127.51 points or 0.4 percent to 32,825.95 and the S&P 500 dipped 6.23 points or 0.2 percent to 3,962.71.
In overseas trading, stock markets across the Asia-Pacific region turned in a lackluster performance on Wednesday ahead of the Fed announcement. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both ended the day nearly unchanged.
Meanwhile, the major European markets have moved to the downside on the day. While the U.K.’s FTSE 100 Index has fallen by 0.5 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is just below the unchanged line.
In commodities trading, crude oil futures are falling $0.61 to $64.19 a barrel after sliding $0.59 to $64.80 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,728.40, down $2.50 compared to the previous session’s close of $1,730.90. On Tuesday, gold inched up $1.70.
On the currency front, the U.S. dollar is trading at 109.16 yen compared to the 109.00 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1914 compared to yesterday’s $1.1903.
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