Futures climb on Ukraine peace talks, Fed decision ahead

(Reuters) – U.S. stock index futures surged on Wednesday, spurred by signs of progress in Ukraine-Russia peace talks, while investors braced for a widely expected Federal Reserve interest rate hike later in the day.

Sentiment was also boosted after China said it would roll out policy steps favorable for its capital markets and strive to reach an agreement on China-U.S. audit supervision cooperation, fueling a rally in U.S.-listed China shares.

The Fed is seen as raising interest rates by at least 25 basis points in what would be the first in a series of interest-rate hikes this year, as the central bank steps up the fight against stubbornly high inflation.

The policy statement is due at 2 p.m. EDT (1800 GMT) and will be followed by Fed Chair Jerome Powell’s news conference, which traders will likely parse for details on how the central bank plans to end its bond-buying program.

Big banks rose in premarket trading. Bank of America and Citigroup up 1.5% and 1.6%, respectively, as U.S. Treasury yields hit their highest since mid-2019. [US/]

Tesla Inc added 2.9%, to lead gains among the shares of other tech titans.

Oil majors Chevron Corp and Exxon Mobil rebounded from a two-day sharp fall, as crude prices moved higher. [O/R]

Ukraine’s President Volodymyr Zelenskiy said the talks were becoming “more realistic”, while Russian Foreign Minister Sergei Lavrov said there was “some hope for compromise”, with neutral status for Ukraine.

A wild rally in oil prices earlier this month on Western sanctions on Russian oil products had sparked fears about higher inflation and hit to economic growth at a time when global central banks are considering tightening their monetary policies.

At 06:44 a.m. ET, Dow e-minis were up 360 points, or 1.07%, S&P 500 e-minis were up 53.5 points, or 1.26%, and Nasdaq 100 e-minis were up 248.75 points, or 1.85%.

U.S.-listed shares of Baidu, Alibaba Group, JD.com, Tencent Music, Pinduoduo Inc Didi Global surged between 14.9% and 36.7%.

On the economic data front, February reading on retail sales is due at 08:30 am ET.

The CBOE volatility index, also known as Wall Street’s fear gauge, fell to 28.54 points, its lowest level since Feb. 28.

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