Sept 16 (Reuters) – U.S. stock index futures attempted a recovery on Wednesday following a two-day slide, as lower oil prices offered some relief during a tense wait for the Federal Reserve’s interest rate decision.
The rate move, scheduled to be announced at 2 p.m., will be crucial to investor sentiment at a time when elevated Treasury yields, inflation and the escalating Middle East conflict have kept risk appetite in check.
While traders see a nearly 93% chance of an increase, according to the CME FedWatch tool, uncertainty persists.
Fed Chair Kevin Warsh was picked by U.S. President Donald Trump with the expectation that he would cut interest rates. If the central bank stands pat, it could throw its credibility into question, especially as Warsh has said he remains focused on taming price pressures, analysts say.
“We think market pricing for a rate hike may be overly confident,” said Yung-Shin Kung, head and chief investment officer at Mast Investments.
A rate increase could be a weak tool to address the primary factors driving inflation, such as tariffs and the AI infrastructure buildout, he added.
At 4:41 a.m. ET, Dow E-minis were up 24 points, or 0.05%, S&P 500 E-minis rose 11.25 points, or 0.15%, and Nasdaq 100 E-minis gained 87.25 points, or 0.30%.
The benchmark S&P 500 has fallen 1.3% so far this month, as of Tuesday’s close.
“Some market weakness shouldn’t be surprising. Drawdowns have generally occurred during periods of uncertainty about the path of policy,” wrote Brian Levitt, chief global market strategist at Invesco.
Oil prices dipped, following an unexpectedly large build in U.S. crude inventories. Brent crude futures were down less than 1% to $107.72 and U.S. West Texas Intermediate crude futures slipped 1.5% to $104.28.
Energy stocks were in negative territory. Chevron and ConocoPhillips fell 0.3% each.
Tech stocks were mixed in premarket trading, with Nvidia up less than 1% and Meta flat. Microsoft and Apple fell marginally.
Among chipmakers, Intel rose more than 5% while Marvell Technology gained nearly 2%.
A joint call by top AI executives to slow down the development of the technology has clouded the outlook for the tech sector, although there is little clarity as yet on what such a slowdown would look like.
(Reporting by Niket Nishant in Bengaluru; Editing by Joyjeet Das)
Comments