US pre-open: Stocks cautiously higher ahead of FOMC decision

Wall Street futures were slightly higher ahead of the bell on Wednesday as market participants looked ahead to the outcome of the Federal Reserve's two-day policy meeting.

As of 1300 BST, Dow Jones futures were up 0.10%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.09% and 0.15% firmer, respectively.

The Dow closed 15.90 points lower on Tuesday in what was a mixed session for major indices.

Wednesday's primary focus will be the Federal Open Markets Committee's interest rate policy decision at 1900 BST, with the central bank widely expected to make a long-awaited rate cut following an aggressive multiyear hiking effort aimed at cooling surging inflation. It has been suggested that the Fed will lower interest rates by at least a quarter of a percentage point, with several analysts expecting to see an even bigger 50 basis point cut.

Trade Nation's David Morrison said: "Traders are now watching events in the US as the Federal Reserve concludes its two-day monetary policy meeting tonight and announces its rate decision (see below). This seems likely to trigger some market turbulence. It's clear that the Fed will announce its first rate cut since March 2020. But it is far from clear if they favour 25 basis points over 50. The CME's FedWatch Tool indicates that 'real money' is betting on 50 bps, so there's a high probability that someone will be disappointed. It’s extremely rare to go into a Fed meeting with this amount of uncertainty. This is extremely unfortunate given the pivotal nature of tonight’s decision."

Elsewhere on the macro front, mortgage applications surged 14.2% in the week ended 13 September, according to the Mortgage Bankers Association of America, the sharpest increase since mid-August's 18-month high of 16.8% and a fourth-consecutive weekly gain. Applications to purchase a home were 5% higher, while applications to refinance a home shot up 24% week-on-week.

Still to come, monthly building permits and housing starts data will be published at 1330 BST

Reporting by Iain Gilbert at Sharecast.com