By Dhirendra Tripathi
Investing.com -- Stocks scaled even higher peaks on Tuesday ahead of the Federal Reserve’s highly anticipated policy statement, boosted by solid corporate earnings.
Fed policymakers are expected to announce the withdrawal of pandemic-era stimulus when they conclude their two-day meeting on Wednesday afternoon.
Elon Musk, CEO of high-flying Tesla Inc (NASDAQ:TSLA), put out a curious tweet that said the electric car maker had not signed a contract with rental car giant Hertz, and that comment sent Tesla shares falling 4% after hitting a new record high on Monday.
Avis Budget Group Inc (NASDAQ:CAR) a rental car rival to Hertz, shot up nearly 100% as of mid-afternoon after positive earnings and signs that consumer demand is returning.
All eyes are on the Fed's policy meeting. Investors will also be listening to what the central bank says about interest rates and the recent spike in inflation. For months it has said such price increases are transitory.
Solid corporate earnings, in addition to stimulus from the Fed, have pushed stocks higher in the last few weeks, with the three major indexes each hitting new highs.
On Tuesday, Covid-19 vaccine maker Pfizer Inc (NYSE:PFE) gained after it raised its full year sales guidance and said sales from the vaccine could reach $36 billion. Fellow vaccine maker Moderna Inc (NASDAQ:MRNA)’s earnings report comes out later this week.
Here are three things that could affect markets tomorrow:
1. CVS earnings
CVS Health Corp (NYSE:CVS)’s third-quarter revenue is seen at $70.52 billion and profit per share at $1.79.
2. Etsy earnings
Etsy Inc (NASDAQ:ETSY) is expected to report third-quarter profit per share of 54 cents on revenue of $519.05 million.
3. Fed decision
The U.S. Federal Reserve is expected to put its seal on Wednesday on the much-anticipated decision to start unwinding its $120 billion monthly bond purchases. The program began in March 2020 and has been hailed for its spectacular role in saving the U.S. as well as the global economy from the wrath of the pandemic.
The market will also be looking out for cues on the next crucial decision the Fed has to take at a time of record inflation: that of hiking interest rates that have stayed at zero since the March intervention. The Fed’s decision will come out at 2:00 PM ET (1800 GMT).