U.S. index futures were trading flat early Wednesday, suggesting a muted start to the session as investors hold off on major bets ahead of the Federal Reserve’s policy announcement this afternoon.
With markets broadly expecting the central bank to keep interest rates steady, traders remain focused on the Fed’s accompanying statement for any clues on the path forward for monetary policy.
Caution is also prevailing as investors await earnings updates from major tech players Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META), which are due after the market closes today. Meanwhile, Friday’s July jobs report and trade policy developments are also weighing on sentiment.
In a post on Truth Social this morning, former President Donald Trump announced that a 25% tariff on imports from India will go into effect this Friday, adding to growing trade tensions.
Stocks finished Tuesday in the red after failing to hold early gains. The Dow Jones Industrial Average shed 204.57 points, or 0.5%, to close at 44,632.99. The Nasdaq Composite slipped 80.29 points, or 0.4%, to 21,098.29, while the S&P 500 fell 18.91 points, or 0.3%, to 6,370.86.
The retreat marked a modest correction after recent record highs for both the S&P 500 and the Nasdaq, as investors locked in profits and turned cautious ahead of today’s Fed meeting.
Traders are also monitoring U.S.–China trade talks currently taking place in Stockholm, ahead of a reciprocal tariff deadline set for Friday. Trump reiterated earlier in the week that countries lacking individual trade agreements with the U.S. could soon face tariffs ranging from 15% to 20% on their exports.
On the economic front, July saw a slight uptick in consumer sentiment. The Conference Board’s consumer confidence index rose to 97.2, up from a revised 95.2 in June. Economists had forecast a more modest rise to 95.8.
Separately, the Labor Department reported that U.S. job openings in June dipped slightly, but not as much as economists had anticipated.
Sector performance was mixed. Pharmaceutical stocks led the laggards, dragging the NYSE Arca Pharmaceutical Index down 2.6%. Transportation shares also saw a notable pullback, with the Dow Jones Transportation Average declining 2.3%.
In contrast, commercial real estate, natural gas, and utilities stocks posted solid gains. Oil services and steel stocks also lost ground on the day, contributing to the broader market’s cautious tone.
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