Here are the top news, trends, and analysis investors need to start their trading day:
1. Dow is going to ricochet, looks like he’s ending the streak of four down days
A screen shows Federal Reserve Chairman Jerome Powell working in an item on the trading floor of the New York Stock Exchange (NYSE) on August 27, 2021.
Brendan McDermid | Reuters
Dow futures rose 200 points as investors wait Wednesday afternoon for clues from the Federal Reserve as to when to scale back their massive Covid-era bond purchases. The Dow Jones Industrial Average and S&P 500 looked like they would end a three-day losing streak on Tuesday afternoon but closed lower. The Nasdaq closed higher and ended a two-session losing streak. Over the month, the Dow, S&P 500 and Nasdaq are down 4%, just over 3.7% and nearly 3.4%, respectively. Monday’s collapse in Wall Street worries over the Fed, contested Chinese real estate company Evergrande, and Washington’s battle over the debt ceiling accelerated September’s crash.
2. Fed is expected to signal tapering, issue quarterly forecasts
Federal Reserve Chairman Jerome Powell testifies during a hearing of the U.S. House Oversight and Reform Selection Subcommittee on the Coronavirus Crisis on Capitol Hill in Washington, United States, on June 22, 2021.
Graeme Jennings | Reuters
The Fed ends its two-day September meeting on Wednesday and will release its latest monetary policy statement along with quarterly economic and interest rate forecasts at 2:00 p.m. ET. Fed Chairman Jerome Powell is expected to inform the media 30 minutes later. The central bank is widely expected to indicate that it is getting ready to announce a schedule to reduce its monthly purchases of government bonds and mortgage-backed securities by $ 120 billion. No change in interest rates close to zero is expected. Powell has said that increasing the cost of debt is seen separately from reducing it.
3. China’s Evergrande is making interest payments on a domestic bond
China Evergrande Group’s headquarters in Shenzhen, Guangdong Province, China on February 9, 2021.
Shen Longquan | Visual China Group | Getty Images
China’s contested Evergrande agreed on Wednesday to make interest payments on a domestic bond while the Chinese central bank poured cash into the banking system to allay fears of impending financial contagion from the debt-laden property developer. Evergrande’s debt crisis is unlikely to have the same consequences as the collapse of US investment bank Lehman Brothers in 2008, analysts said. In terms of the extent of the possible impact on international markets, analysts point to a big difference between the Evergrande crisis and the Lehman collapse: Evergrande holds land while Lehman holds financial assets.
4. House Dems pass bill to avoid closure, suspension of debt ceiling
House Speaker Nancy Pelosi, D-California, holds her weekly press conference at the Capitol Visitor Center on Wednesday, September 8, 2021.
Tom Williams | CQ Roll Call, Inc. | Getty Images
The House of Representatives passed a bill to prevent the federal government from closing and suspending the debt ceiling to prevent a potential economic disaster. Tuesday’s vote was 220-211, with all Democrats supporting it and all Republicans against. While the measure is being submitted to the Senate, Republicans are threatening to block it, which could lead the Democrats to find another way forward. Congress must pass a funding plan by September 30th to prevent a shutdown. The US will also exhaust all of its options to keep paying its bills sometime in October, Treasury Secretary Janet Yellen told congressional leaders.
5. Pfizer makes an additional 500 million doses of Covid vaccine available to the US for donation
A Pfizer-BioNTech Covid-19 vaccine vial will be given on Jan.
Robyn Beck | AFP | Getty Images
US-based Pfizer and its German partner BioNTech announced on Wednesday that they will be providing the US government with an additional 500 million doses of their Covid vaccine, which they will in turn donate to lower-income countries. The move extends the companies’s existing agreement with the US to provide additional doses of vaccine at a not-for-profit price to less disadvantaged nations. It also brings the total number of cans made available for donation to these countries to 1 billion. President Joe Biden will hold a virtual summit with leaders on vaccines on Wednesday.
The FDA could make a formal decision on Pfizer’s boosters before the CDC begins a two-day third dose meeting on Wednesday. An FDA advisory committee unanimously voted on Friday to approve boosters for the medically vulnerable and those aged 65 and over.
– Reuters contributed to this report. Follow all market activity like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.