Stocks are likely to show a lack of direction in early trading on Wednesday as traders await the Federal Reserve’s monetary policy announcement this afternoon. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures down by just 0.50 points.

Trading activity is likely to be subdued in the lead up to the Fed’s latest monetary policy announcement scheduled for 2 pm ET.

The Fed is likely to leave monetary policy unchanged, but traders will be paying close attention to any changes to the accompanying statement.

The central bank’s comments about its asset purchase program are likely to be in focus, as many analysts expect the Fed to signal that it is starting to think about tapering.

Along with the monetary policy announcement, the Fed is also due to provide updated projections for the economy, inflation and interest rates.

Traders are likely to keep a close eye on the latest interest rate projections, as the Fed’s previous forecast indicated rates would remain at near-zero levels through 2023.

Ahead of the Fed announcement, the Commerce Department released a report this morning showing housing starts rebounded in the month of May.

The Commerce Department said housing starts jumped by 3.6 percent to an annual rate of 1.572 million in May after plunging by 12.1 percent to a revised rate of 1.517 million in April.

Economists had expected housing starts to surge by 3.9 percent to a rate of 1.630 million from the 1.569 million originally reported for the previous month.

Meanwhile, the report said building permits slumped by 3.0 percent to an annual rate of 1.681 million in May after falling by 1.3 percent to a revised rate of 1.733 million in April.

Building permits, an indicator of future housing demand, had been expected to decrease by 1.7 percent to a rate of 1.730 million from the 1.760 million originally reported for the previous month.

A separate report from the Labor Department showed import prices increased by more than expected in the month of May.

The Labor Department said import prices jumped by 1.1 percent in May after climbing by an upwardly revised by 0.8 percent in April.

Economists had expected import prices to increase by 0.8 percent compared to the 0.7 percent advance originally reported for the previous month.

The report also showed export prices spiked by 2.2 percent in May after surging by an upwardly revised 1.1 percent in April.

Economists had expected export prices to climb by 0.8 percent, matching the increase originally reported for the previous month.

With traders looking ahead to the Fed’s monetary policy, stocks moved to the downside during trading on Tuesday. The Nasdaq and the S&P 500 pulled back after ending Monday’s trading at new record closing highs.

The major averages all closed in negative territory, although the tech-heavy Nasdaq underperformed its counterparts. While the Nasdaq slid 101.29 points or 0.7 percent to 14,072.86, the Dow fell 94.42 points or 0.3 percent to 34,299.33 and the S&P 500 dipped 8.56 points or 0.2 percent to 4,246.59.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.5 percent and China’s Shanghai Composite Index slumped by 1.1 percent, although South Korea’s Kospi bucked the downtrend to reach a new record high.

Meanwhile, the major European markets are turning in a lackluster performance on the day. While the German DAX Index is down by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both just above the unchanged line.

In commodities trading, crude oil futures are rising $0.28 to $72.40 a barrel after jumping $1.24 to $72.12 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,857.20, up $0.80 compared to the previous session’s close of $1,856.40. On Tuesday, gold slid $9.50.

On the currency front, the U.S. dollar is trading at 109.84 yen compared to the 110.08 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.2122 compared to yesterday’s $1.2126.

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