U.S. stock futures suggest a muted open on Wednesday, with markets lacking clear direction after the previous session’s decline.
Investors are staying cautious ahead of the upcoming policy announcement from the Federal Reserve later in the day.
Data from CME Group’s FedWatch Tool shows markets are fully pricing in a pause in interest rates for a third consecutive meeting.
With that outcome largely expected, attention is likely to turn to the Fed’s statement for signals about the future path of monetary policy. However, in the absence of firm guidance, focus may shift toward earnings from major technology companies.
Alphabet Inc. (NASDAQ:GOOGL), Amazon.com Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT) are all due to report after the closing bell.
As part of the so-called “Magnificent Seven,” their results are expected to play a key role in shaping sentiment, particularly as questions re-emerge around the sustainability of AI-related spending.
At the same time, markets have shown resilience in the face of another surge in oil prices, with U.S. crude futures briefly climbing above $100 per barrel following renewed tensions involving Iran and comments from President Donald Trump.
“Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!” Trump said on Truth Social, alongside an image of himself holding a rifle and the words “No more Mr. Nice Guy!”
Market Recap
After a mixed session on Monday, U.S. equities moved lower on Tuesday, with all three major indices finishing in negative territory and technology stocks leading the decline.
The Nasdaq Composite dropped 223.30 points, or 0.9%, to 24,663.80. The S&P 500 fell 35.11 points, or 0.5%, to 7,138.90, while the Dow Jones Industrial Average edged down 25.86 points, or 0.1%, to 49,141.93.
The Nasdaq pulled back from its recent record close as artificial intelligence-related stocks came under pressure following a report from The Wall Street Journal that OpenAI had missed internal targets for both user growth and revenue.
Sources cited in the report suggested that the shortfall has raised concerns about the company’s ability to sustain its heavy investment in data center infrastructure.
Oracle Corporation (NYSE:ORCL), which is closely tied to OpenAI through a major infrastructure partnership, fell 4.1%.
Semiconductor stocks also declined, including Broadcom Inc. (NASDAQ:AVGO), Advanced Micro Devices Inc. (NASDAQ:AMD), and NVIDIA Corporation (NASDAQ:NVDA).
Oil Prices and Geopolitical Tensions
Higher oil prices added another layer of uncertainty, with U.S. crude briefly trading above $100 per barrel before easing.
The rally has been fueled by ongoing geopolitical tensions between the U.S. and Iran.
Recent developments suggest that Trump is unlikely to accept Iran’s proposal to reopen the Strait of Hormuz while postponing negotiations over its nuclear programme.
In another Truth Social post, Trump said Iran is in a “state of collapse” and is seeking to reopen the Strait of Hormuz as it deals with internal leadership challenges.
CNN reported that Iran is preparing a “revised proposal,” with mediators in Pakistan waiting for the updated plan.
Sector Performance
Gold-related stocks declined sharply as bullion prices dropped, dragging the NYSE Arca Gold Bugs Index down 4.6%.
Semiconductor stocks also came under heavy pressure, with the Philadelphia Semiconductor Index falling 3.6%.
Weakness was also seen in computer hardware, networking, and airline stocks, while energy shares, particularly oil and gas companies, moved higher.
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