Stock futures mixed after earnings, Fed decision

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Stock futures looked for direction Wednesday evening amid a mixed batch of corporate earnings results and a Federal Reserve decision that indicated the central bank was still looking for the US economy to recover further before adjusting its monetary policies.

Contracts in the S&P 500 are down slightly. The index ended the regular session in the red but hovered less than 0.5% below its all-time high close. Contracts on the Dow rose, while contracts on the Nasdaq fell.

Facebook (FB) shares tumbled in late trading after the company said it saw a slowdown in sales in the second half of the year, and indicated that an update to Apple’s iOS app tracking would negatively impact its core advertising business. Comments overshadowed what was otherwise a second-quarter report that was topping estimates, with revenue growing much more than expected as the online advertising industry recovered further. Peer tech firm PayPal (PYPL) also saw shares fall after delivering current quarter forecasts that didn’t exceed consensus estimates.

Investors also continued to digest the Fed’s decision that the central bank was close to announcing and beginning to roll back crisis-era policies, but not for long. Specifically, the FOMC’s latest statement said that “the economy has made progress toward” the central bank’s goals of making more significant progress in the recovery, but that “the committee will continue to assess progress in upcoming meetings.”

“We’ve made progress, but not other substantive progress,” Paul Ashworth, chief US economist at Capital Economics, wrote in a note on Wednesday. “It’s hard to say definitively whether this is hawkish or not, because it’s crazy that what is considered substantial incremental progress has not been quantified and appears to mean something a little different for every FOMC participant.”

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“Overall, we’re a little closer to knowing when the tapering might start – but there are a lot of other big questions like how fast the tape is going and what happens to the balance sheet after that,” Ashworth added.

The debate over when the Fed will announce its pandemic-era asset purchase program and begin to scale back has become a major concern for market participants, given that this quantitative easing has been pivotal in supporting asset prices over the past year. The Federal Reserve continued to make purchases totaling $120 billion per month in US Treasuries and mortgage-backed securities, although Federal Reserve Chairman Jerome Powell indicated at his press conference on Wednesday that the time to scale back those amounts may come “in upcoming meetings.” ”

Ian Shepherdson, chief economist at Pantheon, wrote in a note. “President Powell noted that the spread of the delta variable has caused greater uncertainty, but policy makers are still moving forward with their in-depth discussions.”

“Both the FOMC and Chairman Powell’s statement reiterated the Fed’s view that the increase in inflation was due to ‘temporary’ or ‘temporary’ factors.” Thus, the Fed is not under pressure to make any immediate decisions.

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6:02PM ET Wednesday: Stock futures mixed

Here are the main moves in the markets as the evening session started on Wednesday:

S&P 500 futures contract (ES=F): -1.25 points (-0.03%) at 4392.5

Dow Jones futures (YM=F): +41 points (+0.12%) to 34875.00

Nasdaq Futures (NQ=F): -28.75 points (-0.19%) to 14,982.75

Crude Oil (CL = F): unchanged at $72.39 per barrel

Gold (GC=F): + $7.00 (+0.39%) to $1,806.70 per ounce

Treasury 10-Year (^TNX): Unchanged, yield 1.238%

NEW YORK, NY – May 28: A view of the entrance to the New York Stock Exchange on May 28, 2020 in New York City. The New York Stock Exchange partially reopened the trading floor on May 25 after a two-month closure due to the COVID-19 pandemic. Government guidelines encourage mask-wearing in public with strong social distancing in effect as all 50 states in the USA have begun a gradual process of slowly reopening after weeks of stay-at-home measures to slow the spread of COVID-19. (Photo by Alexei Rosenfeld/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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