As Wall Street awaited the Federal Reserve's year-end policy decision, US stock futures remained close to the baseline on Wednesday morning.
While contracts linked to the S&P 500 (ES=F) and the Nasdaq 100 (NQ=F) remained stable, Dow Jones Industrial Average futures (YM=F) dropped slightly below the flatline.
Following multiple sessions of sideways trade as investors postpone making large wagers in anticipation of the Fed's announcement, the action has been quiet.
According to the CME FedWatch tool, markets are pricing in a nearly 90% possibility that the central bank would decrease interest rates by quarter points for the third time in a row.
However, there is some tension surrounding the choice. Members of the FOMC are still divided; while some officials contend that looser policy is necessary to assist a cooling labor market, others caution that additional easing could run the danger of rekindling inflation.
Traders will be watching Chair Jerome Powell's press conference and the post-meeting statement, which is scheduled to be released at 2 p.m. ET on Wednesday, for hints about the committee's future plans.
Ahead of the important Federal Reserve policy meeting, global bond rates increased to levels not seen since 2009, indicating that investors are worried that US interest-rate reduction cycles may soon come to an end.
After missing Tuesday's quarterly revenue projections, GameStop's (GME) stock dropped 6% before the bell on Wednesday. Shares of US manufacturer GE Vernova (GEV) increased 6% in premarket trade following a dividend doubling.
Wall Street was waiting for the Fed to act as the next catalyst, but Tuesday's trading session lacked momentum. Due to JPMorgan's (JPM) weakness, the Dow (^DJI) led the decline. Strength in Tesla (TSLA) and Alphabet (GOOG) helped the Nasdaq Composite (^IXIC) achieve a little rise.
Oracle's (ORCL) earnings announcement on Wednesday will be a crucial test for the tech industry, as Wall Street increasingly looks to the cloud company as a stand-in for the AI trade. On Thursday, Broadcom (AVGO), Costco (COST), and Lululemon (LULU) will release their earnings.
