Stock futures searched for direction Wednesday evening amid a mixed batch of corporate earnings results and a Federal Reserve decision that signaled the central bank was still looking for the U.S. economy to recover further before adjusting its monetary policies.
Contracts on the S&P 500 edged slightly lower. The index ended the regular session in the red but hovered less than 0.5% below its recent all-time closing high. Contracts on the Dow rose, while those on the Nasdaq dipped.
Shares of Facebook (FB) slid in late trading after the company said it saw a sales deceleration in the second half of the year and suggested an Apple iOS app-tracking update would negatively impact its core advertising business. The comments overshadowed what was otherwise an estimates-topping second-quarter report, with revenue growing far more than expected as the broader internet advertising industry recovered further. Peer tech company PayPal (PYPL) also saw shares slide after delivering a current-quarter forecast that missed consensus estimates.
Investors also continued to digest a Federal Reserve decision that signaled the central bank was moving closer to, but not yet quite at the point of, announcing and beginning a roll-back of its crisis-era policies. Specifically, the Federal Open Market Committee's latest statement said that the "economy has made progress toward" the central bank's goals of achieving substantial further progress in the recovery, but that "the Committee will continue to assess progress in coming meetings."
"We have progress, but not substantial further progress," Paul Ashworth, chief U.S. economist for Capital Economics, wrote in a note Wednesday. "It's hard to say definitively whether this is hawkish or not since, maddeningly, what qualifies as substantial further progress has not been quantified and seems to mean something slightly different to each FOMC participant."
"Overall, we're a little closer to working out when the taper might start — but there are plenty of other big questions like how quickly will the taper proceed and what happens to the balance sheet after that," Ashworth added.
The discussion around when the Fed will announce and begin the tapering of its pandemic-era asset purchase program has become a key concern for market participants, given that this quantitative easing has been central in underpinning asset prices over the past year. The Federal Reserve has continued to carry out purchases totaling $120 billion per month in U.S. Treasuries and agency mortgage-backed securities, though Federal Reserve Chair Jerome Powell signaled in his Wednesday press conference that the time to taper these could come "in the coming meetings."
The Fed "nudged the tapering question a bit further along, noting that 'progress' has been made towards its goals, but not yet the 'sufficient further progress' required to trigger tapering," Ian Shepherdson, Pantheon Macroeconomics chief economist, wrote in a note. "Chair Powell noted that the spread of the Delta variant has induced greater uncertainty, but policymakers still currently are pressing ahead with their tapering discussions."
"Both the FOMC statement and Chair Powell repeated the Fed's view that the increase in inflation is due to 'transitory' or 'temporary' factors," he added. "The Fed therefore is under no pressure to make any immediate decisions."
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6:02 p.m. ET Wednesday: Stock futures mixed
Here were the main moves in markets as the overnight session kicked off on Wednesday:
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S&P 500 futures (ES=F): -1.25 points (-0.03%) at 4,392.5
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Dow futures (YM=F): +41 points (+0.12%) to 34,875.00
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Nasdaq futures (NQ=F): -28.75 points (-0.19%) to 14,982.75
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Crude (CL=F): unchanged at $72.39 a barrel
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Gold (GC=F): +$7.00 (+0.39%) to $1,806.70 per ounce
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10-year Treasury (^TNX): unchanged, yielding 1.238%
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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