US pre-open: Stocks seen higher ahead of Fed announcement

US stocks looked set for a positive open on Wednesday as investors eyed the latest policy announcement from the Federal Reserve.

At 1230 GMT, Dow Jones Industrial Average futures were up 1%, while S&P 500 and Nasdaq futures were 0.9% higher.

Oanda analyst Craig Erlam said: "Sentiment remains extremely fragile as we approach the end of the year and investors will be hoping that the Fed will bring an end to the sell-off that its chairman started almost three months ago. While it is harsh to place the blame for the market turbulence solely on Jerome Powell, it was clearly the straw that broke the camel’s back and there is a hope that a dovish announcement today could go some way to undoing the damage of the last few months.

"A dovish hike is widely expected today and increases next year reduced to one or two, although I wonder whether they may hold off and surprise the markets. I may not agree with Trump’s constant Fed bashing but he may have a point on this occasion. With the global economy facing lower growth in 2019, including the US, inflation in check and US stocks in correction territory, it may not be the best time to be raising rates."

In corporate news, General Mills was 2% higher in pre-market trade as the Cheerios owner's second-quarter profit beat analysts' expectations.

3M was likely to be in focus after it agreed to buy the technology business of healthcare technology provider M*Modal for an enterprise value of $1bn.

Pfizer was up in pre-market trade as it agreed to merge its consumer healthcare unit with that of London-listed GlaxoSmithKline.

Shares of Eli Lilly could be active after the drug maker said 2019 revenue and profit would be ahead of analysts' expectations.

The Fed announcement is at 1900 GMT. Before that, existing home sales are at 1500 GMT.