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Inventory futures rise as buyers assess Fed replace

Stock futures rose Wednesday night after the Dow Jones Industrial Average and the S&P 500 fell following a Federal Reserve update by Chair Jerome Powell at the end of their two-day meeting.

Futures linked to the Dow rose 128 points, or 0.3%. S&P 500 futures and Nasdaq 100 futures gained 0.5% and 0.8%, respectively.

Some tech stocks were higher in extended trading after sustained fluctuations in the regular session. Netflix rose more than 4% after it was announced that Bill Ackman had bought 3.1 million shares from Pershing. Tesla gained nearly 3% after a strong earnings report. Meanwhile, Intel fell 2% despite strong gains.

In regular trading, the Dow ended the day down 129 points after gaining more than 500 points at one point following the Fed update. The S&P 500 lost 0.2% and the Nasdaq Composite was little changed, boosted by Microsoft's post-earnings gain.

The week's volatility continued on Wednesday, with stocks falling after the Fed ended its two-day meeting and signaled the central bank would hike rates to combat persistent inflation. Powell said there is "quite a lot of room" before the job market is hurt. The benchmark yield for 10-year government bonds rose to over 1.8% after his remarks.

"While the outcome of the meeting provided some clarity on how the Fed would begin the process of unwinding monetary accommodation, it did not provide the guidance needed on the timing and magnitude of the policy change," said Charlie Ripley, senior investment strategist for Allianz investment management.

Some investors have started betting on as many as five rate hikes this year following Powell's news conference. Uncertainty about the timing and extent of the Fed's plans to tighten monetary policy had been building since the December meeting.

"Today's meeting fully convinced market participants that a March rate hike is certain, but with Chair Powell making no time commitments, the door is slightly open for a slower Fed," Ripley added.

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Upholdings' Robert Cantwell said markets rallied after Tuesday night's strong earnings report from Microsoft, which appeared to be a "good guiding star" for social media, games, software and other Nasdaq categories ahead of the Fed update.

"The market is completely overshooting and going insane in our view, creating great opportunities for long-term growth investors to buy a lot of great stocks because, interestingly, this hasn't really affected companies that actually have debt," Cantwell told Fed rates. "Since late last year, the market has most aggressively discounted companies that will generate more money in the future than they do today… We're a little upside down now."

Thursday is a busy earnings morning, with Mastercard, Deutsche Bank, Blackstone, Southwest Air and JetBlue all set to report quarterly results before the bell. Danaher, Valero and Northrop Grumman will also report.

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