Dow Futures Rise, Oil Surges Ahead of Fed Meeting—and What Else Is Happening in the Stock Market Today

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Federal Reserve Chair Jerome Powell’s press conference will be the highlight of the day.

Kevin Dietsch/Pool/Getty Images

Stocks edged higher ahead of a hotly anticipated decision on monetary policy from the Federal Reserve, which is expected to raise interest rates by a half-point this month.

Futures for the Dow Jones Industrial Average rose 70 points, or 0.2%, after the index ended 67 points higher on Tuesday at 33,128. S&P 500 futures signaled a start 0.3% into the green with the Nasdaq poised to increase 0.3%.

Overseas, the pan-European Stoxx 600 fell 0.4% and Hong Kong’s Hang Seng Index retreated 1.1%.

All eyes are on the Federal Reserve and Fed Chair Jerome Powell’s press conference later in the day. The central bank is expected to announce its second interest-rate increase this year, having increased rates by a standard 25 basis points in March.

“The Fed are a near certainty to raise rates by 50 basis points,” said Jim Reid, a strategist at Deutsche Bank . “It’ll be the first time the Fed have hiked at consecutive meetings since 2006. So we enter a new era that won’t be familiar to many.”

Facing historically high inflation, the central bank is expected to raise rates many more times this year and next, as well as engage in quantitative tightening through the reduction of its balance sheet and bondholdings.

“The Fed is about to attempt to untie the Gordian knot of inflation with a sledgehammer,” said Neil Wilson, an analyst at broker Markets.com.

The market has comfortably priced in a half-point hike from the Fed, though an even larger increase of 75 basis points seems to be within the realm of possibility. Investors will be closely monitoring Powell’s press conference and whether the Fed chair appears to be more “hawkish” in telegraphing future rate increases or the pace of quantitative tightening.

“Markets are primed to react to whether Powell turns up the hawkish dial even higher at his press conference,” said Han Tan, an analyst at broker Exinity. “Refusal to overtly rule out a 75 basis-point hike may be interpreted as a hawkish signal.”

Stocks have inched higher this week, gaining on Monday and Tuesday after both the S&P 500 and Nasdaq hit new bottoms for the year last Friday.

Write to Jack Denton at jack.denton@dowjones.com