Futures on the Dow Jones Industrial Average (INDEXDJX:DJI) are signaling a slow churn higher today, as traders take a wait-and-see approach ahead of this afternoon's Federal Open Market Committee (FOMC) announcement. Specifically, at 2 p.m. ET, the FOMC will release its latest monetary policy decision, with a press conference from Fed Chair Janet Yellen to follow at 2:30 p.m. ET. While expectations are for the FOMC to leave interest rates unchanged at the moment, speculators will take a fine-toothed comb to Yellen's statements, looking for hints of a specific timeline for when the Fed may raise rates.
Turning to the charts, "The next big hurdle for markets to overcome is the 1,950 area on the S&P 500 Index (SPX), which is the site of its former all-time highs," noted Schaeffer's Senior Trading Analyst Bryan Sapp. "It's very close right now, as we're only about 10 points away -- and a move above there would likely follow through to 2,000. Meanwhile, 1,920 is the key level of support to hold."
Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are about 4 points above breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,033,096 call contracts traded on Tuesday, compared to 503,924 put contracts. The resultant single-session put/call ratio edged up to 0.49, while the 21-day moving average dropped to 0.54.
From the Trading Floor
"Yesterday's consumer price index (CPI) data came in a little hotter than expected, and futures initially sold off really hard after the release of the data," said Sapp. "It seems that many are interpreting this uptick in prices as a signal that inflation is on the rise, and it could lead to the Fed raising rates sooner than expected. Today is the FOMC policy statement and subsequent press briefing by Janet Yellen, so it will be interesting to see if this data point is addressed -- and any implications it may have for the market."
Currencies and Commodities
Earnings and Economic Data
The regularly scheduled crude inventories report and the current international trade balance will be released today. Meanwhile, the FOMC's most recent interest-rate decision and economic forecast will be announced at 2 p.m. ET, followed by Fed Chair Janet Yellen's press conference. Companies stepping into the earnings confessional include FedEx (FDX), Jabil Circuit (JBL), and Red Hat (RHT).
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