Strong numbers of Apple, Boeing set to uplift US stocks ahead of Fed meeting

U.S. stocks were set for a strong open on Wednesday as results from Apple Inc and Boeing Co calmed nerves ahead of the Federal Reserve's update on monetary policy and fresh U.S.-China trade talks. The iPhone maker's shares rose 4.6 per cent in premarket trading after the company reported sharp growth in the services business and Chief Executive Officer Tim Cook said trade tensions between the United States and China were easing.

The report assuaged worries after Apple earlier this month cut its sales forecast for the current quarter on slowing demand in China, whose economy has been dragged down by a trade war with the United States. Boeing shares jumped 5.8 per cent after the planemaker topped earnings estimates, as a boom in air travel underpinned a projection for full-year deliveries of around 900 commercial aeroplanes.

"For Apple, there was certainly more focus on the weakness in China and now investors seem more positive as a lot of the bad news had been factored in," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "Positive earnings are definitely encouraging for markets today."

Stocks have been marred in the past two sessions on fears of a slowdown in China hurting one of the longest U.S. expansions in history and weakening profits, after a series of warnings from U.S. bellwethers. Though fourth-quarter earnings have largely exceeded Wall Street expectations, investors worry that the trade dispute could add to a global slowdown as the impact of U.S. corporate tax cuts fade.

Washington and Beijing officials will meet next door to the White House on Wednesday in the highest-level talks since U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce in their trade war in December. The Fed is scheduled to release its policy statement at 2 p.m. ET (1900 GMT). The central bank is not expected to adjust its policy, but the language in the statement will be scrutinized for signs of Chairman Jerome Powell's willingness to pause the central bank's gradual interest rate increases.

Fed policymakers have been clear they plan to be "patient" about further tightening in the face of an overseas slowdown and market volatility. The ADP national employment report showed private-sector jobs increased by 213,000 in January, above the estimated 178,000 rises. The data comes ahead of the more comprehensive non-farm payrolls report on Friday.

At 8:46 a.m. ET, Dow e-minis were up 217 points, or 0.88 per cent. S&P 500 e-minis were up 11.25 points, or 0.43 per cent and Nasdaq 100 e-minis were up 60 points, or 0.9 per cent. Advanced Micro Devices Inc jumped 9.2 per cent after the chipmaker reported record quarterly growth in data centre sales and projected 2019 revenue growth above Wall Street estimates.

Other chip stocks rose with Micron Technology Inc, Nvidia Corp, Lam Research Corp up between 1.5 per cent and 2.5 per cent. Health insurer Anthem Inc rose 6.5 per cent after the company topped quarterly profit estimates and said it was speeding up the launch of its in-house pharmacy benefits management business.

AT&T Inc dropped 2.5 per cent after the company missed analysts' estimates for quarterly net new wireless subscribers, as it struggled to attract customers in a saturated U.S. phone market.