Stocks Pull Back Ahead Of Fed Interest Rate Decision

Stocks Decline From Record Highs

S&P 500 futures are losing some ground in premarket trading as traders take a pause ahead of the Fed Interest Rate Decision which will be announced today.

The Fed is expected to leave the rate unchanged and announce that it will reduce its regular asset purchases. Most likely, traders will focus on the Fed’s comments about interest rates’ future trajectory.

Treasury yields have recently pulled back as bond traders expected that Fed will stay dovish. Any comments that signal that Fed is worried about inflation will push yields higher, which may put some pressure on tech stocks.

It should be noted that Fed has shown its willingness to support markets for many months in a row, so Fed Chair Jerome Powell’s commentary will likely stay as dovish as possible even if Fed highlights growing concerns about inflation.

ADP Employment Change Report Exceeds Expectations

U.S. has just released ADP Employment Change report which indicated that private businesses added 571,000 jobs in October compared to analyst consensus of 400,000.

It remains to be seen whether the strong report will be able to provide support to stocks at the beginning of today’s trading session as traders will likely stay focused on the upcoming Fed’s commentary.

Today, traders will also have a chance to take a look at the final reading of Services PMI report for October which is projected to show that Services PMI improved from 54.9 in September to 58.2 in October.

WTI Oil Is Under Pressure As Crude Inventories Rise

WTI oil found itself under pressure and made an attempt to settle below the $82 level after API Crude Oil Stock Change report indicated that crude inventories increased by 3.59 million barrels compared to analyst consensus of 1.57 million barrels.

Crude inventories continue to rise, which is bearish for oil prices. Today, oil traders will focus on EIA Weekly Petroleum Status Report. In case this report confirms API numbers, oil may find itself under more pressure.

For a look at all of today’s economic events, check out our economic calendar.