Wall Street Quiet Ahead of Fed Decision

(AP) -- Wall Street quietly drifted between small gains and losses early Wednesday ahead of a closely-watched decision by the Federal Reserve on whether to raise interest rates in the midst of a global banking crisis.

Futures for the Dow Jones Industrials inched less than 0.1% higher, while futures for the S&P 500 were essentially flat.

Tuesday on Wall Street, the S&P 500 rose 1.3% to lock in its first back-to-back gain since Silicon Valley Bank's rapid failure began two weeks ago. Some of Wall Street's fears over the banking sector were calmed by Treasury Secretary Janet Yellen' s assurance that the government could provide more assistance to lenders if needed.

Investors are awaiting an interest rate decision by the Federal Reserve, which is expected to temper its efforts to tame inflation given the recent turmoil that has wracked the banking sector. Most economists expect the Fed to announce a relatively modest quarter-point hike in its benchmark rate, its ninth hike since March of last year.

"Equity markets are treading water this morning ahead of the Fed rate decision and following a decent rebound a day earlier," Craig Erlam of Oanda said in a commentary. "It very much feels like we're just taking one day at a time at the minute."

Britain's consumer inflation rate jumped to 10.5% in February from 10% the month before in a sign that price pressures persist, surprising analysts and adding pressure on the Bank of England to raise interest rates at its meeting on Thursday.

In London, the FTSE 100 was unchanged, Germany's DAX gained 0.5% and the CAC 40 in Paris rose 0.3%.

Markets around the world have pinballed sharply this month on worries the banking system may be cracking under the pressure of the fastest set of hikes to interest rates in decades.

In Asian trading, Tokyo's Nikkei 225 surged 1.9% to 27,466.61, catching up on gains after the market was closed on Tuesday for a holiday. Hong Kong's Hang Seng index advanced 1.7% to 19,591.43 and the Shanghai Composite index added 0.9% to 3,265.75.

Australia's S&P/ASX 200 jumped 0.9% to 7,015.60. The Kospi in South Korea climbed 1.2% to 2,416.96.

In equities trading on Wednesday, meme stocks were rising before the opening bell. GameStop, one of the most heavily traded off-brand stocks during the pandemic, surged 47% after the video game retailer posted a surprise profit for the fourth quarter.

Other so-called meme stocks followed GameStop higher, though with more modest gains. AMC Entertainment Holdings rose nearly 6% while Bed Bath & Beyond climbed 8.5%.

Tuesday the Dow Jones Industrial Average rose 1%, while the Nasdaq composite jumped 1.6%.

Yellen told a bankers' group more government assistance "could be warranted" if risks arise that could bring down the system. That could mean making sure customers at a weakened bank get all their money, even those with more than the $250,000 limit insured by the Federal Deposit Insurance Corp.

Earlier this month, the U.S. government said it would make all depositors at Silicon Valley Bank and Signature Bank whole after their depositors rushed to pull their money out en masse, causing the second- and third-largest U.S. bank failures in history.

Investors have since been on the lookout for others that might fall. Much focus has been on First Republic Bank, whose stock had lost 90% for the month through Monday but jumped 29.5% Tuesday. It was down 6% in premarket trading.

Hopes for the banking industry began to turn over the weekend after regulators pushed together two huge Swiss banks. Shares of both banks rose Tuesday in Switzerland, including a 12.1% jump for acquirer UBS. Credit Suisse, meanwhile, rose 7.3% after tumbling a day earlier.

In other trading Wednesday, U.S. benchmark crude oil lost 17 cents to $69.50 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.85 to $69.67 on Tuesday.

Brent crude, the pricing basis for international oils, gave up 12 cents to $75.20 per barrel.

The dollar rose to 132.90 Japanese yen from 132.47 yen. The euro gained to $1.0796 from $1.0770.