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HomeEconomyFutures edge up ahead of Fed policy meet, Instacart debut in focus

Futures edge up ahead of Fed policy meet, Instacart debut in focus

 
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By Ankika Biswas and Shristi Achar A

(Reuters) – U.S. stock index futures inched higher on Tuesday ahead of a Federal Reserve monetary policy meeting and as investors awaited grocery delivery app Instacart’s Nasdaq debut to assess a potential recovery in the IPO market.

Maplebear Inc, parent of Instacart, secured a fully diluted valuation of $9.9 billion after its IPO was priced at $30 per share, the top of its indicated price range.

Arm Holdings (NASDAQ: ARM) last week had a stellar market debut, raising hopes of a bounce back in the initial public offering (IPO) market.

Investors are also focused on the two-day Fed meeting that will start later in the day, with the central bank expected to hold benchmark interest rate at the current 5.25%-5.50% range on Wednesday.

Recent economic data has signaled that core inflation is crawling toward the Fed’s 2% target, though crude prices gaining for three consecutive weeks to hit around 10-month highs remains a concern.

“The market narrative has again shifted from optimism that inflation has been dealt with to fears of an inflation re-acceleration driven by robust consumer data and recovering oil prices,” said Matthew Morgan, head of fixed income, Jupiter Asset Management.

“Central banks should pause here and wait and see the impact of what they have already done rather than risk serious damage to the economy.”

Economic data has also largely indicated that the U.S. economy remains resilient, boosting the hopes for a soft landing and helping stave off concerns of a possible recession.

Investors will closely monitor the Fed’s quarterly report on economic projections to gauge participating members’ longer-term policy outlook.

Traders have fully priced in a pause by the Fed on Wednesday, with a 71% likelihood of interest rates remaining unchanged in November, according to CME’s FedWatch tool.

While most of the key data releases on inflation are out, investors will keep an eye on U.S. housing data for August, due at 8: 30 a.m. ET.

At 7: 23 a.m. ET, Dow e-minis were up 28 points, or 0.08%, S&P 500 e-minis were up 5.75 points, or 0.13%, and Nasdaq 100 e-minis were up 22.5 points, or 0.15%.

Block Inc fell 0.8% in premarket trading as Alyssa Henry, CEO of the fintech firm’s unit, Square, will exit the company where she has worked for more than nine years.

CVS Health Corp (NYSE: CVS) gained 0.9% after Evercore ISI upgraded the U.S. pharmacy chain to “outperform” from “in line”.

Intel (NASDAQ: INTC) shares added 1.3% ahead of the chipmaker’s two-day developers’ event that kicks off later On Tuesday.

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