S&P 500 futures fall as Wall Street braces for Fed rate decision: Live updates

The U.K.’s FTSE 100 was 0.2% higher at 8:30 a.m. London time.

Most European bourses are closed for the May Day public holiday. The regional Stoxx 600 index closed lower Tuesday as it clocked its first monthly decline since October.

Japanese trading house Mitsui and Co reported a 6.4% fall in profit to 1.08 trillion yen ($6.84 billion) for its 2023 financial year ended March 31.

Profit before tax came in at 1.3 trillion yen, down 6.7% year-on-year, while revenue dipped 6.9% to 13.32 trillion yen compared to the same period last year.

Despite the poorer results, shares of the company climbed 1.23% as it also announced a 200 billion yen share buyback from May 2 to Sept. 20.

Mitsui will buy back up to 40 million shares, or 80 million after a share split on July 1.

The sudden strengthening of the yen on Monday is likely due to intervention by Japanese authorities, Reuters reported, citing money market data from the Bank of Japan.

Money market data revealed that the central bank’s projection for Wednesday’s money market conditions indicated a 7.56 trillion yen ($47.91 billion) net receipt of funds.

Reuters said this compared with a 2.05 billion to 2.30 billion yen estimate from money market brokerages that excludes intervention, adding that currency trades take two days to settle.

On Monday, the yen weakened to a 34-year low against the greenback, hitting 160.03 before strengthening to about 155 in the space of a few hours.

South Korea posted a 13.8% increase in exports in April, a sharp increase compared to the 3.1% rise in March, according to preliminary estimates by the country’s customs service.

The rise also beat the 13.7% increase expected by economists polled by Reuters.

Imports to South Korea climbed 5.4%, less than the 6.2% rise expected and a reversal from the 12.3% fall in March.

As such, the country’s trade balance narrowed to $1.53 billion, down from the $4.29 billion recorded in March.

— Lim Hui Jie

Of the 11 sectors within the S&P 500, utilities managed to eke out a narrow gain for this month.

Utilities added 1.6% in April, while the other 10 sectors were in the red. Energy managed a narrow loss of 0.9%, while consumer staples – another defensive category – slipped 1.1%.

The sector’s gains were buoyed by NextEra Energy, which advanced 4.8% in April. Consolidated Edison jumped 3.9%, and Dominion Energy gained 3.6%.

Utilities, known for their steady dividends, could come into focus as investors look for income-producing assets to cushion their portfolios during rocky markets. Consider that NextEra Energy touts a dividend yield of 3.1%, while ConEd yields 3.5%.

–Darla Mercado

Bank of America on Tuesday pushed back by six months when it expects the Federal Rserve to start lowering interest rates, to December from June, and revised higher where it thinks the benchmark fed funds rate will end when the Fed is through with the next cycle.

“Following the recent stretch of inflation data that came in firmer than we expected, we revised higher our outlook for inflation in 2024 and, in turn, our outlook for Fed policy,” wrote U.S. economist Michael Gapen. “We now expect rate cuts to begin in December, versus June previously, and for the terminal rate in any easing cycle to finish at 3.5%-3.75%, up from 3.0%-3.25% previously.”

With the current fed funds rate at 5.25%-5.50%, Tuesday’s move from BofA means the bank is now forecasting no more than seven quarter-point reductions from the Fed, rather than a previous expectation of nine.

“In short, we think the signal from the recent inflation data is that monetary policy will have to be tighter on average over the forecast horizon – not just in 2024 – to bring inflation down to 2.0%,” Gapen wrote.

— Scott Schnipper

Check out the companies making headlines in extended trading.

Starbucks — Shares slipped almost 10% in extended trading after the coffee chain missed fiscal second-quarter estimates on the top and bottom line. Starbucks earned 68 cents per share on revenue of $8.56 billion, and missed the forecast from analysts polled by LSEG of 79 cents per share for earnings and $9.13 billion for revenue.

Pinterest — Shares surged nearly 19% following an earnings and revenue beat in the first quarter. Pinterest reported adjusted earnings of 20 cents per share, topping forecasts for 13 cents per share, according to LSEG. Revenue growth also accelerated in the quarter.

Super Micro Computer — Shares dropped nearly 8% after Super Micro Computer posted fiscal third-quarter revenue of $3.85 billion, missing the $3.95 billion consensus estimate, according to LSEG. Adjusted per-share earnings of $6.65 topped the per-share estimate of $5.78. The company also issued strong fourth-quarter revenue guidance.

— Hakyung Kim