Stock futures lower after Fed keeps interest rates near zero

Traders work on the trading floor of the New York Stock Exchange.

NYSE

US stock futures were slightly lower in trading Wednesday night after the Federal Reserve ended its two-day meeting of the Federal Reserve Open Market Committee by not making asset purchases.

Dow Jones Industrial Average futures fell 16 points. S&P 500 futures and Nasdaq 100 futures traded in slightly negative territory.

PayPal and Facebook fell 5% and 3% respectively in after-hours trading after warning of a significant growth slowdown as they reported quarterly earnings.

Meanwhile, Ford’s shares rose nearly 4% after raising its outlook for 2021, saying it is selling more cars that are more expensive, despite missing analysts’ earnings estimates.

The moves in futures came after Fed chairman Jerome Powell warned in a press conference that while the economy is making progress towards its goals, there is still a way to go before the central bank would actually adjust its loose policy . Government bond yields rose slightly in anticipation of the announcement but fell slightly following Powell’s comments.

“We still have some work to do on the job side,” said Powell. “I think we are still a long way from having made significant progress towards the maximum employment target. I would like some strong employment figures.”

In regular trading, the Dow Jones Industrial Average fell 127.59 points, or nearly 0.4%, to 34,930.93 points. The S&P 500 ended the session little changed at 4,400.64. The Nasdaq Composite climbed 0.7% to 14,762.58.

“The market understood that we had a bad quarter here compared to last year,” said Michael Reynolds, vice president of investment strategy at Glenmede. “What is far more important this season are the forecasts we get for the quarters ahead as the economy adjusts to the new normal.”

Key averages are on track to end the month higher, with the S&P up 2.4% for July. The Nasdaq Composite and the Dow were up 1.8% and 1.2%, respectively.

Amazon, Pinterest and Anheuser-Busch will report their results on Thursday. Dealers will also keep an eye on the latest metrics on initial jobless claims and upcoming home sales.

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