Dow Jones futures rose slightly early Wednesday, along with S&P 500 futures and Nasdaq futures, with the Federal Reserve rate-hike decision this afternoon. AMD, Eli Lilly and regional banks such PacWest and Western Alliance were among the early movers.
Meanwhile, private payrolls swelled by 296,000 in April, according to the ADP Employment report. That was well above March's downwardly revised 142,000 gains and estimates for just 133,000. The April jobs report is due Friday morning.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures climbed 0.2% and Nasdaq 100 futures advanced 0.25%, even with AMD stock sliding.
Crude oil futures fell nearly 3% to below $70 a barrel.
The 10-year Treasury yield sank 2 basis points to 3.42%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
PacWest Bancorp turned higher and Western Alliance Bancorp pared big premarket losses in volatile action after Tuesday's regional bank meltdown. Advanced Micro Devices tumbled on guidance, with chip leader Nvidia also slipping.
But Eli Lilly surged to a record high. The drug giant reported early Wednesday that its Alzheimer's drug donanemab significantly slowed progression of the disease, according to phase three trial data. Patients showed a 35% slower cognitive decline.
Lilly stock jumped 5%. Biogen, which has competing Alzheimer's treatments, fell more than 1%, off initial lows.
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Fed Rate Hike Outlook
The Federal Reserve is widely expected to raise rates at 2 p.m. ET, bringing the fed funds rate to 5%-5.25%. Fed chief Jerome Powell will hold his press conference at 2:30 p.m. ET. Markets expect policymakers to pause, but Fed chief Powell and his colleagues will likely want to preserve Fed flexibility.
So the focus will be on Fed meeting statement and Powell hints about monetary policy going forward.
Stock Market Rally Tuesday
The stock market rally retreated from near 2023 highs, though the major indexes all found support at their 21-day moving averages.
The Dow Jones Industrial Average and Nasdaq composite fell 1.1% in Tuesday's stock market trading. The S&P 500 index lost 1.2%.
The small-cap Russell 2000, filled with financials, slumped 2.1%.
U.S. crude oil prices tumbled 5.3% to $71.66 a barrel. The 10-year Treasury yield fell almost 14 basis points to 3.44%.
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Bank Stocks
PACW stock rose 1% in heavy premarket trade, swinging between a double-digit premarket decline and a solid advance already this morning. That's after PacWest Bancorp dived 28% on Tuesday to a record close. WAL stock sank 0.2%, but also well off premarket lows. Western Alliance gave up 15% Tuesday.
The SPDR S&P Regional Banking ETF edged higher after diving 6.3% Tuesday to its worst levels in 30 months. PACW stock, Western Alliance and many other regional bank stocks are in the KRE ETF.
Bank stocks began a waterfall sell-off after Tuesday's open, so watch for volatile trading in Wednesday's session. Regional banks' reaction to the latest Fed rate decision and outlook could be key for the broader market rally.
AMD Stock
AMD stock sold off nearly 8% early Wednesday, signaling a decisive move below the 50-day moving average. The chip giant topped first-quarter views, but guided low on second-quarter revenue and gross margins. AMD stock had been setting up for a possible entry.
Meanwhile, NVDA stock fell slightly in premarket trade after sliding 2.4% on Tuesday. Nvidia stock popped 4.2% on Monday, clearing a four-weeks-tight buy point of 281.20. But shares are in danger of moving below that entry. Nvidia is the clear chip leader.
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