US pre-open: Futures edge higher ahead of FOMC's interest rates decision

The Dow Jones Industrial Average is expected to open approximately 27 points up, while the S&P 500 and the Nasdaq are set to begin the session four and 14 points higher respectively.

All eyes on Fed

The US central bank concludes its two-day meeting on Wednesday and while it is widely expected to postpone a first hike in interest rates until the new year, market participants were reluctant to make any big bets.

“The US markets are looking much more tentative ahead of this evening’s FOMC statement,” said Spreadex’s financial analyst Connor Campbell.

“Whilst it would be hard to find anyone in the world expecting a rate-hike this month, investors still seem wary of this clarity-lacking Fed, leaving the Dow to face a stagnant open this afternoon.”

The Fed will communicate its decision at 1800 GMT, while investors will also analyse a reading of advance in trade goods at 1230 GMT.

Meanwhile, the Mortgage Bankers Association said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, declined 3.5% in the week ended 23 October.

Apple gains, Twitter tumbles

In company news, Apple climbed 1.56% in pre-market trading after the iPhone and iPad maker said late on Tuesday that its fourth quarter profit surged 31%.

“Regardless of the worries markets might have about Chinese growth this has not negatively affected sales of iPhones to the Asian powerhouse as once again Apple have been able to post much better figures that had been expected,” said IG’s senior market analyst Alastair McCaig.

There was less positive news for Twitter, however, with the social media giant plummeting 10.2% in pre-market trading after delivering a lower-than-expected outlook late on Tuesday, when it also reported its active user growth was smaller than expected.

The earnings season continues on Wednesday, with chocolate maker Hershey, luxury car maker Ferrari, drugstore chain Walgreens Boots Alliance and food group Mondelez all scheduled to report before the open, while PayPal and GoPro will publish results after the close.

The majority of Asian stocks were firmly in the red on Wednesday, as investors remained cautious ahead of the upcoming Federal Reserve’s decision on interest rates, while European stocks rebounded from the previous session’s dip and were mostly higher.

The dollar was broadly flat against the yen but gained 0.17% against the pound and lost 0.28% against the euro, while gold futures climbed 0.44% to $1,172.03.

Oil prices gained ground, with West Texas Intermediate climbing 0.69% to $43.50 a barrel and Brent crude rising 0.78% to $47.18 a barrel.