U.S. Stocks Set To Open Lower As Fed Disappoints

Powell Did Not Promise Additional Asset Purchases

Yesterday, U.S. Federal Reserve left the interest rate unchanged and promised to keep rates low until the end of 2023. For the longer term, most Fed policy makers want to see a rate of 2.5%.

However, the perspective of having low rates for years was not dovish enough for traders. The Fed did not expand its asset purchase program and added that additional government support was needed to boost the economy.

S&P 500 gained downside momentum after the Fed’s commentary, and this momentum is set to be continued in today’s trading session as S&P 500 futures are down by more than 1% in premarket trading.

WTI Oil Is Trying To Settle Above The $40 Level

Hurricane Sally and falling inventories provided significant support to oil prices. Currently, oil tries to settle above the $40 level. If this attempt is successful, oil-related stocks will have a chance to continue their rebound.

Recently, OPEC and IEA cut their oil demand forecasts, and there is a risk that oil will fail to find enough support at the $40 level once U.S. Gulf of Mexico companies restart their oil production after Hurricane Sally.

Today, OPEC+ is set to meet in order to discuss the current state of the market but no material announcements are expected.

Continuing Jobless Claims Declined to 12.6 Million

U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims declined to 860,000 compared to analyst consensus of 850,000. Continuing Jobless Claims fell to 12.6 million compared to analyst consensus of 13 million.

Traders also have a chance to evaluate the latest data on Building Permits and Housing Starts. In August, Building Permits declined by 0.9% month-over-month while Housing Starts decreased by 5.1%. Both numbers were below analyst forecasts.

While the employment data was a bit better than expected thanks to the material decline in Continuing Jobless Claims, the housing data may put additional pressure on traders’ mood.

The initial rebound in the housing sector was strong, and the latest numbers indicate that the economy may be slowing down.

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