A trader works on the exchange floor on the last trading day before Christmas at the New York Stock Exchange (NYSE) in Manhattan, New York City, December 23, 2021.
Andrew Kelly | Reuters
Share futures rose slightly in overnight trading Wednesday after the major US stock average fell sharply in the first losing session of the year.
Dow Jones Industrial Average futures add about 65 points, or 0.2%. S&P 500 futures gained 0.1% and Nasdaq 100 futures gained 0.1%.
Minutes of the December meeting of the Federal Reserve revealed the central bank has discussed reducing its balance sheet in another move to aggressively roll back its pandemic-era easy monetary policy.
The Fed’s plan to reduce the amount of Treasuries and mortgage-backed securities it holds comes in handy because it has reduced its bond purchases and is set to raise interest rates once it ends.
“Almost all participants agree that balance sheet flows are likely to begin at some point after the first increase in the target range for the federal funds rate,” he said. specified minutes.
Shares fell after the release of the minutes. The blue-chip Dow Jones Industrial Average closed at 392.54 points, or 1.07%, lower after hitting an intraday record early in the session. The S&P 500 fell 1.94%. The tech-heavy Nasdaq saw its biggest single-day drop since February, losing 3.34%.
Kathy Jones, head of fixed income at Charles Schwab, said: “If you push a wave of liquidity up and that liquidity starts to fade away, I don’t think it’s too surprising that you would met with a reaction”.
“This is the year we’re going to move from extremely easy monetary and fiscal policy to less easy and less expansionary monetary fiscal policy. That will have some impact on the financials. Risk assets have increased because the discount rate is too low,” Jones added.
All 11 S&P 500 sectors fell in Wednesday trading.
Investors are waiting for the quarterly earnings report from Walgreens Boots Alliance and Outdoor shower bed before the fifth bell.
On the data front, the weekly jobless claims report is expected to be released on Thursday morning.
—Jeff Cox of CNBC contributed to this report.
