Top 5 Things to Know in the Market on Wednesday

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, May 2:

1. Markets Await Fed Policy Decision

The Federal Reserve is set to hold interest rates steady when it announces its policy decision at 2:00PM ET (1800GMT).

Fed Chair Jerome Powell will not hold a press conference following the decision and no updated economic projections will be released.

Instead, investors will be focusing on the central bank's post-meeting statement, which will likely underline expectations that it will lift borrowing costs in June, as widely expected.

Markets will also be on the lookout to see whether the Fed upgrades its view of both the economy and inflation, which would be considered hawkish.

The Fed currently forecasts another two rate rises this year, although an increasing number of policymakers see three as possible, given signs of rising inflation and low unemployment.

Besides the Fed, investors also looked ahead to key U.S. economic data due later in the session for fresh clues on the likely trajectory of monetary policy in the months ahead.

The highlight of Wednesday's economic calendar will be the ADP jobs report at 8:15AM ET (1215GMT), which is often seen as a warmup act for the big Friday government nonfarm payrolls report.

2. Dollar Holds Around 2018 Highs

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was a shade lower at 92.20, not far from Tuesday’s highs of 92.37, the strongest level since January 9.

The euro held near Tuesday’s four-month low after data showed that euro zone economic growth slowed in the first quarter, further undermining the case for the European Central Bank to start scaling back its stimulus program in the coming months.

Meanwhile, the 10-year U.S. Treasury yield stood at 2.99%, just below the 3%-threshold. It climbed to a more than four-year peak of 3.035% last week.

The Treasury market is focused on an 8:30AM ET (1230GMT) Treasury announcement on its refunding needs for the third quarter.

Market experts mostly expect $1 billion additional issuance at the short end for 2-year notes to 7-year notes in each month of the quarter, but after that there is some disagreement on how much the Treasury issues in the 10-year and 30-year section of the market.

3. Apple Sends U.S. Stock Futures Higher

U.S. stock futures pointed to a slightly higher open, as sentiment improved after results from tech bellwether Apple topped Wall Street forecasts.

Apple (NASDAQ:AAPL) shares rose about 4% in pre-market trade. The company beat revenue and profit expectations in its March quarter, while reporting resilient iPhone sales after Tuesday's closing bell. It also announced $100 billion in additional stock buybacks.

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The tech-heavy Nasdaq 100 futures ticked up 30 points, or roughly 0.5%, the S&P 500 futures advanced 5 points, or about 0.2%, while the blue-chip Dow futures rose 35 points, or roughly 0.2%.

Elsewhere, in Europe, the continent's major bourses were higher, boosted by some strong earnings updates and a rising tech sector.

Earlier, in Asia, markets in the region closed slightly lower, as several markets in the region resumed trade after a holiday.

4. Tesla Earnings In Focus

Tesla (NASDAQ:TSLA) results due out after the market close will be the main event on the earnings calendar, in what should be another busy day of corporate earnings.

Wall Street analysts expect the company to report an adjusted loss per share of $3.42 on revenue of $3.32 billion. As has been the case in previous reports, analysts have been squarely focused on the Model 3, as well as its cash burn and potential capital needs in the coming years.

Besides Tesla, a slew of S&P 500 companies are also set to report results on Wednesday.

Before the market open, Mastercard (NYSE:MA), CVS Health (NYSE:CVS), Wayfair (NYSE:W), Chesapeake Energy (NYSE:CHK), Sodastream (NASDAQ:SODA) and Humana (NYSE:HUM) will be the highlights.

After the close, joining Tesla, will be Square (NYSE:SQ), Kraft Heinz (NASDAQ:KHC), Logitech (NASDAQ:LOGI), Fitbit (NYSE:FIT) and FireEye (NASDAQ:FEYE).

Snap (NYSE:SNAP) earnings will also be in focus, after its stock plunged around 15% in after-hours trading following its disappointing earnings release.

5. Oil Prices Rise Ahead Of EIA Supply Data

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended April 27 at 10:30AM ET (1430GMT), amid forecasts for an oil-stock increase of 739,000 barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 3.4 million barrels last week.

There are often sharp divergences between the API estimates and the official figures from EIA.

Oil prices were on the front foot, with U.S. WTI crude futures rising 47 cents, or around 0.7% to $67.73 per barrel, while London-traded Brent crude futures were at $73.41 per barrel, up 27 cents, or about 0.4%.