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Jul 27, 2016

U.S. Stock Market Future Indications - July 27, 2016: U.S. Futures Rise, Led Higher by Apple

Victor Reklaitis
U.S. stock futures advanced Wednesday, as investors cheered Apple Inc.’s earnings and waited for a Federal Reserve statement due in the afternoon.

S&P 500 futures ESU6, +0.20% rose by 4.20 points, or 0.2%, to 2,167.50, while Dow Jones Industrial Average futures YMU6, +0.21%  tacked on 45 points, or 0.2%, to 18,443. Nasdaq-100 futures NQU6, +0.69%  jumped by 32.25 points, or 0.7%, to 4,696.
Apple shares AAPL, -0.69%  gained 6% in premarket action after the iPhone maker late Tuesday posted quarterly profit that dropped from a year ago, but beat expectations. Revenue at the world’s largest company by market value also fell, yet topped Wall Street’s forecasts.
Read: iPhone SE, iPad Pro throw new wrinkle into Apple finances
And: Analysts upbeat on Apple as ‘toughest two quarters’ now behind it
Apple profit falls as iPhone sales slump
Apple grappled with the first prolonged slump in iPhone sales since the product was introduced in 2007.
On the Fed front, the U.S. central bank is expected to stand pat on interest rates as it releases a policy statement at 2 p.m. Eastern Time. Traders want to see if Fed chief Janet Yellen and her colleagues offer any signals on the possibility of a September rate hike.
Read: Why the Fed may want to take away the stock market’s punch bowl
The key is whether the Fed’s statement will “build expectations of a hike in the second half of the year or deliver a more dovish message highlighting the heightened risks, including Brexit,” said Craig Erlam, senior market analyst at Oanda, in a note.
“As it stands, the markets have once again come around to the idea that there will be another hike this year, pricing in a 51% chance of it happening by December,” he added.
On Tuesday, the S&P 500 SPX, +0.03%  and Dow DJIA, -0.10%  finished little changed, while the Nasdaq Composite COMP, +0.24% rose to a 2016 closing high.
Other markets: Oil futures CLU6, -0.49%  traded lower, while European stocks SXXP, +0.50% gained. Asian markets were mixed — with the Nikkei up 1.7%, but Shanghai down 1.9% — as investors digested conflicting reports about the Japanese government’s soon-to-be-released stimulus measures. Gold futures GCQ6, -0.05% edged down, while the ICE U.S. Dollar Index DXY, +0.07% was slightly higher.
Economic news: Before the Fed statement hits, investors are due to get a June reading on durable goods orders at 8:30 a.m. Eastern, followed by a June report on pending home sales at 10 a.m. Eastern.
Check out: MarketWatch’s Economic Calendar
Individual movers: Shares in Twitter Inc. TWTR, -1.07%  fell 10% in premarket trading after the social media company’s disappointing earnings report late Tuesday.
Linear Technology Corp. LLTC, +28.93%  could see active trading after Analog Devices Inc. ADI, +3.87%  on Tuesday agreed to acquire its fellow chip maker in a cash-and-stock deal worth $14.8 billion.
Coca-Cola Co. KO, -1.51%  , Boeing Co. BA, +1.44%  and Comcast Corp. CMCSA, -0.43% are among the companies on the earnings docket before the open. Facebook Inc. FB, -0.34% and Whole Foods Market Inc. WFM, -1.33% are among those due to report after the market’s close.