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(Reuters) -U.S. stocks were poised to open higher on Wednesday as signs of progress in Ukraine-Russia peace talks lifted sentiment ahead of a widely expected interest rate hike by the Federal Reserve.
Ukraine’s President Volodymyr Zelenskiy said the talks were becoming “more realistic”, while Russian Foreign Minister Sergei Lavrov said there was “some hope for compromise”, with neutral status for Ukraine.
The global mood was also lifted by China’s promise to roll out more stimulus for the economy and keep markets stable, fueling a rally in U.S.-listed Chinese shares.
The Fed is seen raising interest rates by at least 25 basis points at the end of its two-day meeting later in the day, in what would be the first in a series of rate hikes this year as it steps up the fight against stubbornly high inflation.
The policy statement is due at 2 p.m. ET (1800 GMT) and will be followed by Fed Chair Jerome Powell’s news conference. Traders will be closely watching the updated quarterly economic and interest rate projections for clues on how fast rates will increase.
“Everybody expects a 25-point rate hike later today, but it is probably going to be accompanied by a more cautious but not overly hawkish commentary,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth.
“People are looking mainly for projections about rate hikes going forward and we expect that the Fed is not going to back off from the number of hikes that they are planning for this year but they may take a slower approach to do it.”
Big banks rose in premarket trading. Wells Fargo and Citigroup were up 1.7% and 1.5%, respectively, as U.S. Treasury yields hit their highest since mid-2019. [US/]
Tesla Inc added 2.1%, to lead gains among the shares of tech titans.
Meanwhile, data showed U.S. retail sales rose moderately in February as more expensive gasoline and food forced households to cut back spending on other goods, which could restrain economic growth this quarter.
Oil prices rocketed to as much as $139 per barrel earlier this month following Western sanctions on Russian oil products that fed into fears about higher inflation and slowing economic growth when global central banks are ending their easy monetary policies rolled out to combat the COVID-19 pandemic.
U.S. stocks surged on Tuesday and the S&P 500 ended a 3-day skid as Brent crude fell below $100 a barrel. [O/R]
At 9:00 a.m. ET, Dow e-minis were up 303 points, or 0.9%, S&P 500 e-minis were up 42.5 points, or 1%, and Nasdaq 100 e-minis were up 197.25 points, or 1.47%.
U.S.-listed shares of Baidu, Alibaba Group, JD.com, Tencent Music, Pinduoduo Inc Didi Global surged between 15.4% and 40.0%.
The CBOE volatility index, also known as Wall Street’s fear gauge, fell to 28.8 points, its lowest level since Feb. 28.
Reporting by Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila
