AP and Reuters

Futures edge up ahead of Fed policy meet, Instacart debut in focus


(Reuters) – U.S. stock index futures inched higher on Tuesday ahead of a two-day Federal Reserve monetary policy meeting and as investors awaited grocery delivery app Instacart’s Nasdaq debut to assess a potential recovery in the IPO market.


FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 29, 2023. REUTERS/Brendan McDermid/File Photo

Maplebear Inc, parent of Instacart, secured a fully diluted valuation of $9.9 billion after its IPO was priced at $30 per share, the top of its indicated price range.

Arm Holdings last week had a stellar market debut, raising hopes of a bounce back in the initial public offering (IPO) market.

Investors are also focused on the Fed meeting later in the day, where it is widely expected the central bank will hold benchmark interest rate at the current 5.25%-5.50% range.

Recent economic data has signaled that core inflation is crawling toward the Fed’s 2% target, though a steady climb in oil prices remains a concern. Crude prices have gained for three consecutive weeks, and the benchmarks are around 10-month highs.

“The market narrative has again shifted from optimism that inflation has been dealt with to fears of an inflation re-acceleration driven by robust consumer data and recovering oil prices,” said Matthew Morgan, head of fixed income, Jupiter Asset Management.

“Central banks should pause here and wait and see the impact of what they have already done rather than risk serious damage to the economy.”

Investors will also monitor the Fed’s quarterly report on economic projections to gauge participating members’ longer-term policy outlook.

Traders have fully priced in a pause by the Fed on Wednesday when it concludes its meeting, with a 59% likelihood of interest rates remaining unchanged in November and December, according to CME’s FedWatch tool.

While most of the key data releases on inflation are out of the way, investors will keep an eye on U.S. housing data for August.

At 5:32 a.m. ET, Dow e-minis were up 49 points, or 0.14%, S&P 500 e-minis were up 7.25 points, or 0.16%, and Nasdaq 100 e-minis were up 24.5 points, or 0.16%.

Fintech firm Block Inc fell 1.1% in premarket trading as CEO Alyssa Henry of its unit, Square, will exit the company after more than nine years.

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