Stock Futures Fall as Wall Street Seeks More Clues on Fed’s Rate-Hike Plans

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Stock futures fell Wednesday, signaling a lower start for Wall Street as investors await the release of the minutes from the latest Federal Reserve meeting for a deeper look at the central bank’s plans for tightening monetary policy.

Contracts linked to the

Dow Jones Industrial Average
fell 69 points, or 0.2%, to 31,811,

S&P 500
futures were down 0.2% and

Nasdaq
futures slipped 0.2%.

The Federal Reserve raised rates by a half percentage point when it last met May 4 — the first time in 22 years the Fed hiked rates by that much —and unveiled plans to start shrinking its balance sheet next month. Federal Reserve Chairman Jerome Powell also signaled that an additional rate increase of 0.5% could be expected at the next meeting in June. Wall Street expects another 0.5% rate hike in July. 

“Given recent commentary from various Fed officials it could be argued that these minutes are probably a little bit stale, especially given the recent deterioration in some of the recent economic data, and the fact that we look set to get two more 50bps rate moves between now and September,” said Michael Hewson, an analyst at broker CMC Markets.

Hewson said the discussion from the Fed over balance sheet reduction likely will be more interesting, especially since the central bank decided to allow $47.5 billion of Treasury securities and mortgage-backed securities to run off every month between June and August, and not a more aggressive $95 billion, which it will do starting in September.

U.S. stocks on Tuesday finished mostly to the downside though rallied off their lows of the session into the close. The Dow ended the session with a gain of 0.2%, the S&P 500 declined 0.8%, and the Nasdaq slumped 2.4%, following a profit and sales warning from social media company

Snap

(ticker: SNAP) that sank technology shares.

Treasury yields were lower Wednesday with the 10-year yield at 2.742% from 7.258% on Tuesday after the market’s risk-off mood sent bond prices higher.

Here are some stocks on the move Wednesday:

Wendy’s

(WEN) gained 11.6% to $18.15 in premarket trading after Trian Fund Management, led by billionaire Nelson Peltz, said in a filing that it talked with the board of the the fast-food chain about a “an acquisition, business combination (such as a merger, consolidation, tender offer or similar transaction) or other transaction.”

Intuit

(INTU) rose 2.8% after the tax and accounting software company posted better-than-expected fiscal third-quarter earnings and raised its financial forecasts for the year ending in July.

Nordstrom

(JWN) rose 10.1% after the retailer raised its guidance for the second time this year.

Nvidia

(NVDA) shares fell 0.4% ahead of the chip maker’s fiscal first-quarter earnings scheduled for after the closing bell Wednesday.

Write to Joe Woelfel at joseph.woelfel@barrons.com