US pre-open: Futures trade higher ahead of Fed decision
Wall Street futures were in the green ahead of the bell on Wednesday as market participants awaited the outcome of the Federal Reserve's two-day policy meeting.
As of 1215 BST, Dow Jones futures were up 0.27%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.25% and 0.06% higher, respectively.
The Dow closed 313.45 points lower on Tuesday as traders turned their attention to the Fed's looming interest rate decision.
Wednesday's primary focus will be the central bank's interest rate decision, due out at 1900 BST with the FOMC economic projections, while the Fed will hold a press conference at 1930 BST.
Investors widely expect the Federal Reserve to announce another 75 basis point interest rate hike, with bets for a larger 100 basis point increase narrowing after last week's red hot CPI reading.
Markets.com's Neil Wilson said: "The Federal Reserve is set to raise interest rates again today as it concludes its two-day policy meeting. Markets fully expect at least 75bps, with a small chance it will press the nuclear button and go with 100bps. A jumbo move cannot be ruled out as we know the Fed wants to get to restrictive policy as quickly as possible. A 75bps hike would take the effective Fed funds target rate to 3%-3.25% - it needs to get above 4% before it starts looking restrictive.
"While the market has a 75bps hike well understood, there are some concerns that the statement from Jay Powell could be very hawkish. Markets will be on the lookout especially for references to the length of time the Fed will maintain restrictive policy. Traders are also going to pay close attention the updated economic projections for a clue about how far the Fed will go. Terminal rates could rise afterwards. This week has been marked by rising yields and jittery stock markets so hold on tight as it’s likely there is going to more of the same."
On the macro front, US mortgage applications increased by 3.8% on a seasonally adjusted basis in the week ended 16 September, according to the Mortgage Bankers Association, with the refinance index rising 10% from the previous week, while the seasonally adjusted purchase index increased 1% from one week earlier.
Still to come, existing home sales data for August will be published at 1500 BST.
In the corporate space, General Mills will report before the open, while Lennar and Trip.com will publish their latest set of earnings after the close.
Reporting by Iain Gilbert at Sharecast.com