Futures rise on optimism around Fed; FedEx results shine

(C) Reuters. FILE PHOTO: A man walks a dog in the shade past the New York Stock Exchange (NYSE) during hot weather in New York

By Shreyashi Sanyal

(Reuters) – U.S. stock index futures rose on Wednesday as investors hoped for a pledge by the Federal Reserve to keep interest rates low for a prolonged period, with upbeat quarterly results from FedEx also boosting sentiment.

The central bank’s two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it is running below that target.

The Federal Open Market Committee will release its policy statement and economic projections at 2 p.m. ET (1800 GMT), followed by Fed Chair Jerome Powell’s virtual news briefing half an hour later.

Wall Street’s main indexes have bounced after a tech-driven slump last week that pushed the Nasdaq Composite index (IXIC) into correction territory in just three sessions.

After declining for two weeks in a row, the benchmark S&P 500 (SPX) has rebounded 1.8% in the past two sessions, with defensive sectors including real estate <.splrcr> and utilities (SPLRCU) among the biggest gainers.</.splrcr>

At 6:41 a.m. ET, Dow e-minis were up 103 points, or 0.37%, S&P 500 e-minis were up 16 points, or 0.47%, and Nasdaq 100 e-minis were up 56 points, or 0.49%.

Delivery firm FedEx Corp (N:FDX) jumped 10% in premarket trading after reporting a bigger-than-expected quarterly profit, helped in part by price hikes and lower fuel costs.

Shares in rival United Parcel Service Inc (N:UPS) gained 4.6%.

Apple Inc (O:AAPL) rose 0.7%, after ending the previous session just marginally higher, as it rolled out a new virtual fitness service and a bundle of all its subscriptions, Apple One.

Other tech-related stocks including Alphabet Inc (O:GOOGL), Amazon.com Inc (O:AMZN), Tesla Inc (O:TSLA) and Microsoft Corp (O:MSFT) gained between 0.6% and 1.0%.

Investors are also awaiting retail sales data for August, due at 8:30 a.m. ET, with expectations of a reading of 1.0% compared with July’s figures of 1.2%.