US pre-open: Wall Street poised for flat open ahead of Fed announcement

US futures pointed to a steady open on Wall Street as investors looked ahead to the Federal Reserve’s latest policy announcement.

At 1145 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all flat.

At the same time, oil prices were in the black, supported by data from the US Energy Information Administration on Tuesday showing crude stockpiles rose 1.5m barrels last week, which was much less than expected.

Sentiment was also boosted after the Qatari oil ministry said members of the Organization of the Petroleum Exporting Countries will meet oil producers in April to discuss an output cap.

West Texas Intermediate was up 1.9% at $37.03 a barrel and Brent crude was up 1.57% to $39.33.

The Fed is widely expected to keep interest rates unchanged so the focus will be on any clues as to the future path of interest rates.

“We can say with near certainty that the FOMC will hold rates steady this week. However, the Committee is likely to characterise this as a one-off decision to wait out the period of heightened uncertainty, rather than a more extended pause in the normalisation cycle,” said Societe Generale.

“This means that the balance of risks is unlikely to be revised down (still “assessing”), and that the dot plot is unlikely to shift down by more than 25 basis points.”

SocGen said the number of hikes the FOMC will be able to deliver this year depends much more on markets than economic data.

“Since the summer of 2014, financial markets (dollar, equities, credit) have delivered an equivalent to 7-8 rate hikes. During the same timeframe, the FOMC has removed 6 hikes from its dot plot (and will probably have removed 7 after next week). This inter-dependence between the markets and the Fed will continue to make it difficult for the Fed to move meaningfully. This is why we expect no more than two hikes this year, and more likely only one.”

On the corporate front, shares in renewable energy company SunEdison tumbled in pre-market trade after it said it missed the extended deadline to file its annual report because it identified “material weaknesses” in its accounting controls.

Peabody Energy tanked after saying it may not have enough liquidity to continue operating.

Chipotle Mexican Grill was also in the red after it forecast a first quarter net loss.

On the upside, software firm Oracle Corp rose after its third-quarter results beat analysts’ expectations.

The dollar was up 0.5% against the pound, 0.2% versus the euro and 0.3% against the yen.

US CPI and housing starts are due at 1230 GMT. Industrial production is at 1315 GMT and the Federal Open Market Committee announcement is at 1800 GMT, followed by the press conference with chairwoman Janet Yellen at 1830 GMT.