(Reuters) – U.S. stock index futures rose on Wednesday helped by positive earnings updates from companies such as Starbucks and Advanced Micro Devices, with the Federal Reserve likely to deliver the biggest interest rate hike since May 2000.
Advanced Micro Devices Inc rose 6% in premarket trading after the chipmaker forecast stronger-than-expected full-year and second-quarter revenue.
Rival Nvidia Corp added 1.8%.
Starbucks Corp gained 5.9% after the coffee chain posted upbeat quarterly revenue.
Traders are pricing in expectations of a 50 basis points rate hike and announcement of the start of reductions to its $9 trillion balance sheet when the Fed releases its statement at the end of its two-day policy meeting at 2 p.m. ET (1800 GMT).
The spotlight will be on Fed Chair Jerome Powell’s news conference for fresh clues on how far and how fast the U.S. central bank is prepared to go in an effort to bring down high inflation.
Concerns about a hit to economic growth due to a hawkish Fed, mixed earnings from some big growth companies, the conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, with richly valued growth stocks bearing the brunt of the sell-off.
Bearish sentiment, or expectations that stock prices will fall over the next six months, rose sharply to 59.4% in the latest survey by the American Association of Individual Investors. The last time bearish sentiment went above that level was in March 2009 during the financial crisis.
At 6:48 a.m. ET, Dow e-minis were up 119 points, or 0.36%, S&P 500 e-minis were up 16.75 points, or 0.4%, and Nasdaq 100 e-minis were up 40.25 points, or 0.31%.
The first-quarter reporting season is in full swing. Of the 329 companies in the S&P 500 that have reported earnings as of Tuesday, 81.2% have topped analyst expectations according to Refinitiv estimates.
Livent Corp surged 21.6% after it posted a better-than-expected quarterly profit and bolstered its 2022 revenue outlook as it benefited from higher demand for lithium used in electric vehicle batteries.
Airbnb Inc climbed 4.6% after the vacation rental firm projected upbeat second-quarter revenue, betting on pent-up demand to drive a summer of strong travel after COVID-19 curbs were eased globally.
Wells Fargo rose 1% to lead gains among the big banks.
On the data front, readings on ADP private payrolls and ISM non-manufacturing activity for April are due later in the day.
(Reporting by Devik Jain in Bengaluru; Editing by Shounak Dasgupta)
