Ahead of fed rate decision, losing streak by global stocks snaps

by Jonathan Adams

Global stocks rose Wednesday for the first time this week, stopping a steep selloff as investors shifted their focus to the Federal Reserve.

Bank shares helped lift the Stoxx Europe 600 up 1.5% in morning trade, following a strong session in Asia. Futures pointed to a 0.3% opening gain for the S&P 500, after Wall Street’s sharpest four-day drop since February. Changes in futures do not necessarily reflect market moves after the opening bell.

Later Wednesday, the Federal Reserve announces its June interest rate decision and holds a press conference with Chairwoman Janet Yellen. The U.S. central bank is widely expected to keep rates on hold following the worst jobs report in six years, but investors will closely watch its forecasts and policy statement for hints at what the bank might do later this year

“May’s employment data was positive on the margin for risk assets, turning what had become increasingly hawkish Fed rhetoric more cautious,” said Daniel Waldman, strategist at UBS, in a note. He added, “But for this to persist, employment growth needs to stabilize, and the Fed’s more dovish shift, as represented by Chair Yellen’s June 6 speech, needs to last”.

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