Stock futures rally as China's Evergrande negotiates payment, Fed moves into focus

U.S. stock indexes rallied Wednesday as China’s Evergrande reached a bond payment agreement and investors looked ahead to the Federal Reserve’s latest policy decision.

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The Dow Jones Industrial Average rose over 150 points, or 0.45%, while the S&P 500 index and the Nasdaq Composite index advanced 0.47% and 0.29%, respectively.

Embattled Chinese real estate developer Evergrande negotiated a deal to settle interest payments, soothing contagion concerns. Also on Wednesday, the People’s Bank of China injected 90 billion Chinese yuan into the banking system in a show of reassurance.

Meanwhile, the Federal Reserve will on Wednesday afternoon announce its latest policy decision with investors looking for clues about when the central bank may begin tapering its asset purchases.

Fed Chairman Jerome Powell said last month at the Jackson Hole symposium that any tapering announcement is not a “direct signal regarding the timing of interest rate liftoff.”

In stocks, FedEx Corp. reported a 7% drop in quarterly profit and cut its full-year earnings forecast due to its inability to find workers ahead of the crucial holiday season.

General Mills Inc. beat on both the top and bottom lines and guided organic net sales at the high end of its previous range.

Adobe Inc. announced record quarterly revenue and issued better-than-expected earnings guidance for the current quarter.

Stitch Fix Inc. posted a surprise profit as the company’s new direct purchase option, as an alternative to its monthly subscription service, provided a boost.

Elsewhere, Marin Software Inc. shares soared after the company entered into a revenue share agreement with Google to develop its enterprise tech platform and software products.

In commodities, West Texas Intermediate crude oil surged $1.15 to $71.64 a barrel and gold slid $3.50 to $1774.60 an ounce.

Overseas markets were mostly higher.

European bourses rallied across the board with Britain’s FTSE 100 up 1.34%, France’s CAC 40 gaining 1.21% and Germany’s DAX 30 rising 0.73%.

In Asia, China’s Shanghai Composite index jumped 0.4% while Japan’s Nikkei 225 lost 0.67%. Hong Kong’s Hang Seng index was closed for holiday.

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