US futures inch higher ahead of Fed meeting after Evergrande payment plan soothes some investor nerves

Jay Powell, Federal Reserve Chair, struck a cautious tone Tuesday Pool/Getty Images
US futures rose Wednesday as investors focused on the Federal Reserve's decision regarding monetary policy.

Chinese stocks fell less than many had feared, after Evergrande, an embattled developer, said it would make a coupon.

With an offshore bond payment due Thursday, Evergrande could cause more volatility.

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On Wednesday, US stock futures rose as investors waited to see the Federal Reserve's most recent monetary policy decision and worries about Evergrande, a Chinese property developer, receded.

Hengda, an Evergrande unit, announced that it would make a coupon payments and the Chinese central banking pumped a net 90 million yuan ($13.9 trillion) of liquidity into China's financial system. This helped to limit the decline in Asian stocks.

S&P 500 futures gained 0.58% at 4.45 a.m. ET closed 0.08 percent lower on Tuesday after the index plunged. Dow Jones futures increased 0.63% while Nasdaq 100 futures increased 0.4%.

After a two-day holiday, China's CSI 300 index dropped 0.7% overnight in Asia. Tokyo's Nikkei 225 fell 0.67%.

Europe's Stoxx 600 index rose by 0.74% to a record high of 1.05%. This puts it on track for its second day in green. London's FTSE 100 index rose 1.05%.

Stock markets all over the globe have been shaken by Evergrande's debt crisis. Evergrande is China's second largest property developer. Monday's 1.7% drop in the S&P 500 was its largest one-day decline since May.

Some people have suggested Evergrande's large size could mean that a default could send shockwaves throughout the global economy. However, Wall Street consensus is that the Chinese government would manage the problem. Analysts said that the People's Bank of China's cash injection into the banking system helped to cool down market nerves.

Evergrande has a Thursday interest payment on one of its dollar bonds. This could cause more volatility.

Continue reading: History repeats itself, Bank of America warns. But these 27 dividend growth stocks can weather the storm.

Evergrande was the focus of investors, while Evergrande was another. The Fed will end its two-day monetary policies decision on Wednesday. Analysts believe that the Fed will signal its intention to withdraw support for the economy in the coming year after a period of high growth and inflation.

"We expect the statement will indicate that a decrease is likely to occur 'this year,' so long as the economy stays on track," Brett Ryan, a leading economist at Deutsche Bank, stated in a note.

Investors need to know when the Fed will begin trimming or "tapering," its $120 billion per month bond purchases. Ryan stated that he expected the Fed to convey the message that the "bar to pushing the announcement past November is relatively high".

The dollar and US bond yields were not affected by the Fed's decision. Investors don't expect major changes.

The yield on the 10-year US Treasury Note, which is inversely related to its price, remained flat at 1.324%. The dollar index was unchanged at 93.24.

Oil prices rose elsewhere in the markets as a result of tightening supply and global economic recovery. Brent crude oil rose 1.51% to $75.48 per barrel, while WTI crude rose 1.7% at $71.67 per barrel.

According to Bloomberg prices, Bitcoin rose by 3.61% to $42,405, Although Bitcoin was the world's largest cryptocurrency, it stood at $47,000 Monday. However, it has been hard hit by risk aversion in the Evergrande crisis.