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U.S. equity futures moved higher in early Wednesday trading, while Treasury yields and the dollar held steady, as investors braced the final Federal Reserve rate decision of the year later in the session.
Updated at 8:37 AM EST
Housing slump
Housing starts extend their slump last month, matching the slowest pace since mid-2020, as the expected rebound in post-hurricane construction continues to be impacted by higher mortgage rates.
The Commerce Department reported November housing starts at an annual rate of 1.289 million, well shy of Wall Street's 1.343 million forecast and the 1.312 pace recorded in October. Single family starts, however, rose 6.4% from October levels.
The Mortgage Bankers' Association reported earlier this morning that fixed rate for confirming 30-year loans rose 8 basis points last week to 6.75%.
Stock Market Today
Stocks ended lower across the board on Tuesday, with the Dow Jones Industrial Average extending its daily losing streak to nine, the longest since 1978. The 30-stock average, however, is only around 3.5% from its all-time peak.
Broader U.S. benchmarks are also performing well, even with yesterday's pullback, with the S&P 500 up 5.4% over the fourth quarter and 27.34% for the year amid bets that the Fed will round out the year with a rate cut that will add support to a resilient economy and improving corporate profits.
However, while analysts and rate traders fully expect the Fed to deliver its third consecutive reduction this afternoon, a move that would take the Fed Fund rate a full percentage point lower than when the central bank began cutting in September, few expect the same amount of easing next year.
The central bank will publish a fresh Summary of Economic Projects report, which will serve as a guide to future rate moves, alongside today's decision. The report, also known as the 'dot plots', last suggested at least four rate cuts over the course of 2025 when it was published in September.
"The Fed won’t adjust its policy framework mid-cycle. However, as we look to the next few years, a combination of stubborn inflation, capital intensive global investment needs, and high government debt levels may conspire to influence changes to central bank frameworks over the medium term.," said Lauren Goodwin, economist and chief market strategist at New York Life Investments.
"Looking ahead, core PCE has to average 0.1% and 0.2% month-on-month in order for the Fed to keep making progress toward its target," she added.
Related: Retail sales surge tests bets on more Fed rate cuts in 2025
Bond markets are largely steady heading into today's Fed decision, following their worst five-day selloff of the year last week, with benchmark 10-year note holding at 4.405% and 2-year notes trading at 4.255%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.03% higher at 106.979.
On Wall Street, stock futures suggest cautious gains to start the trading day, with the S&P 500 called 16 points higher and the Nasdaq priced for a modest 60 point gain. The Dow, meanwhile, is called 110 points higher.
Stocks on the move include Tesla ( TSLA ) , which was marked 2.6% lower following reports of merger talks between Japanese automakers Nissan and Honda that could challenge its EV market share in key economies.
Nvidia ( NVDA ) shares were also active, rising 2.8% after slumping to a multi-month low last night.
Related: US stocks rule as bull market bets highlight 'American exceptionalism'
In overseas markets, Britain's FTSE 100 was marked 0.24% higher in London following inflation data showing price pressures rising to an eight-month high in November, adding further complexity to the Bank of England's Thursday rate decision.
The region-wide Stoxx 600 benchmark, meanwhile, edged 0.16% higher in Frankfurt.
More Wall Street Analysts:
Overnight in Asia, Nissan shares surged the most in five decades, rising 24% on the session, amid the merger reports with Honda, helping the Nikkei 225 rise 0.72% by the close of trading.
The MSCI ex-Japan index, meanwhile, edged 0.29% higher, powered by gains in South Korea and Hong Kong.
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