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Wall Street set to open lower after election surge; Fed meet in focus


By Sruthi Shankar

(Reuters) - U.S. stock indexes were set to dip on Thursday, following a rally in the previous session that was spurred by relief after the midterm elections, with investor focus shifting to the Federal Reserve's interest rate decision.

The futures pointed to a 0.35 percent opening loss, with investors punishing shares of chipmaker Inc and generic drugmaker Co after their weak forecasts.

Stocks gained more than 2 percent on Wednesday after Americans voted for a divided Congress, which was largely anticipated by investors who raised bets that it would be positive for stocks.

While it could make it harder for to push through new legislations such as additional tax cuts, investors are hoping for compromise on policies such as increasing infrastructure spending.

Despite the dip in futures, which according to traders was natural after strong gains seen on Wednesday, investors are positive about the outcome.

"The general sentiment is I should be buying into a split Congress, because it probably means nothing will happen out of Washington," said Robert Pavlik, at in

The Fed, which is set to release its rate decision at 2:00 pm ET, is expected to leave interest rates unchanged, but the statement that follows could lay the ground for a fourth rate hike in December and for the next year.

A steep selloff in October has taken the down 4.2 percent from its record high, with investors worried that the U.S. could gather more steam and encourage the Federal Reserve to raise interest rates further.

However, some of those worries were put to rest by Wednesday's election results, which reduced the odds of further corporate tax cuts by the

At 8:49 a.m. ET, Dow were down 64 points, or 0.24 percent. were down 11 points, or 0.39 percent and were down 41.75 points, or 0.58 percent.

fell 8.1 percent in premarket trading after the chipmaker forecast sales revenue for the holiday shopping quarter below analysts' estimates, as it took a hit from the loss of chip sales to Apple Inc.

Co dropped 10.0 percent after the company cut full-year earnings forecast on lowered expectations from its

jumped 7.5 after the reported better-than-expected third-quarter profit.

(Reporting by in Bengaluru; Editing by Arun Koyyur)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 08 2018. 19:27 IST