Stock Market Today: Dow Rises, Fed Decision Ahead, Alibaba and JD.com Soar

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Stocks were moving higher Wednesday as markets readied for a long-awaited announcement from the Federal Reserve, which is widely expected to raise interest rates for the first time since 2018.

Futures for the

Dow Jones Industrial Average
rose 270 points, or 0.8%, after the index rallied 599 points Tuesday to close at 33,544.

S&P 500
futures signaled a start 1% in the green, and the

Nasdaq
was poised to climb 1.6%.

Overseas, the pan-European

Stoxx 600
rose 2.2% and Hong Kong’s

Hang Seng Index
surged 9.1%. Chinese stocks were boosted amid reports from state-run media that the government would keep the stock market stable and work to boost economic growth, reversing a selloff that had accelerated in the last week.

While the Russian war on Ukraine and inflationary pressures from volatile oil prices remain in focus, investor attention lies squarely on the Fed. The central bank is widely expected to make its pivot away from Covid-19 pandemic-era monetary policy with a rate hike of 25 basis points.

“In essence today’s Federal Reserve rate decision is probably the easiest one it will have to make this year,” said Michael Hewson, an analyst at broker CMC Markets. “With U.S. headline inflation at 7.9%, and likely to go higher it’s pretty much certain that we will see an interest rate rise later today of 0.25%.”

The Fed’s monetary policy group — the Federal Open Market Committee — will release its decision at 2 p.m. Eastern, followed by a press conference with Fed Chair Jerome Powell. While a rate hike is all but certain, the extent to which the Fed strikes a hawkish tone on future policy, including more aggressive quantitative tightening in the year ahead, has the potential to shake investors.

“There are some on the FOMC who are probably in the camp that want to see a 50 basis-point rate rise, however considering the Russian invasion of Ukraine and the resultant volatility in global commodity prices we could well see a bit of caution,” Hewson noted. “The Fed’s bigger problem is how it manages its messaging for future rate rises against a backdrop of surging input prices which are likely to slow the U.S. economy over the course of the rest of the year.”

On the Ukraine front, there was some optimism buoying stocks in Europe that a diplomatic solution to the conflict could be in sight. Ukrainian President Volodymyr Zelensky said talks with Russia had started to “sound more realistic,” yet remained difficult, according to multiple reports.

Oil prices were higher after a massive drop on Tuesday, with futures for U.S. benchmark West Texas Intermediate crude up 2% to near $98.50 a barrel. Prices bottomed out below $94 on Tuesday after beginning the week trading above $106.

Here are 3 stocks on the move Wednesday:

Shares in popular U.S.-listed Chinese stocks soared, with

Alibaba

(ticker: BABA) up near 20% in U.S. premarket trading.

JD.com

(JD) jumped more than 20% with

NetEase

(NTES) climbing 17%.

Write to Jack Denton at [email protected]