US pre-open: Futures in the green ahead of FOMC decision

As of 1225 BST, Dow Jones futures were up 0.42%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.51% and 0.67% firmer, respectively.

The Dow closed 151.91 points lower on Tuesday, extending losses recorded in the previous session after the Bureau of Labor Statistics revealed the PPI for final demand rose 0.8% in May, in line with analysts' expectations, up from 0.4% in April but down 1.6% on March.

Wednesday's primary focus will be the Federal Reserve's interest rate decision at 1900 BST, which will be followed by a press conference at 1930 BST.

Both investors and economists expect the central bank to take aggressive action to tame surging inflation, with the market betting on a 75-basis-point rate hike following the FOMC's two-day policy meeting - the biggest increase since 1994.

Expectations for the 75-point hike, as opposed to the previously predicted 50-point hike, came about as a result of a hotter-than-expected inflation reading and a rapidly worsening economic outlook.

The yield on the benchmark 10-year Treasury note was down more than ten points at 3.374% ahead of the Fed's decision, while the monetary policy-sensitive two-year note was more than twelve points lower at 3.302%.

Swissquote's Ipek Ozkardeskaya said: "The Federal Reserve will announce its latest rate decision today, but most of the wild ride is certainly done by now; the market fully prices in a 75bp hike at today’s decision. Investors know that the Fed will want to get more aggressive on the back of a difficult-to-ease inflation, and yesterday’s producer data came as another confirmation that inflation has more to inflate in the coming months. At this point, the decision of a 75bp is almost made, the Fed should only confirm the market verdict.

"If the Fed surprises with a 50bp hike, the market will certainly rebound on relief. But the Fed's primary goal is to tame inflation right now, and not to boost the equity markets. And depressed market conditions seem necessary in achieving that goal. Now that the 75bp pill has been swallowed by the market, it would be irrational for the Fed not to go ahead with a bigger hike."

Elsewhere on the macro front, US mortgage applications increased by 6.60% week-on-week in the seven days ended 10 June, according to the Mortgage Bankers Association.

Still to come, May retail sales data and June's NY Empire State manufacturing index were slated for release at 1330 BST, while April business inventories and the NAHB's June housing market index will follow at 1500 BST.

No major corporate earnings were slated for release on Wednesday.

Reporting by Iain Gilbert at Sharecast.com