US equity futures edged higher on Wednesday ahead of the Federal Reserve’s monetary policy announcement, while oil prices declined following an unexpected increase in American inventories. Investors also assessed developments in artificial intelligence, including comments from Meta Chief Executive Mark Zuckerberg and a report about potential financing for OpenAI.
At 07:12 GMT, Dow Jones futures advanced 129 points, or 0.3%. S&P 500 futures increased 21 points, also 0.3%, and Nasdaq 100 futures rose 145 points, or 0.5%.
The gains followed a decline in Wall Street’s main indices during the previous session, when US government bond yields approached their highest levels in nearly two decades.
The rise in yields coincided with higher crude prices as the conflict in the Middle East expanded, adding to market concerns about inflation and the possibility of further interest rate increases.
Vital Knowledge analysts described a feedback cycle in which rising oil prices contribute to higher bond yields, affect investor sentiment and increase pressure on central banks to tighten monetary policy.
Federal Reserve Rate Increase Expected
Investors broadly anticipated a quarter-percentage-point rate increase when the Federal Open Market Committee concluded its two-day meeting on Wednesday.
A 25-basis-point rise would take the federal funds rate to a range of 3.75% to 4%.
Persistent inflation and a resilient US labour market have contributed to expectations that the central bank will increase borrowing costs.
President Donald Trump has advocated lower interest rates. The Federal Reserve, meanwhile, faces the potential trade-off between containing inflation and limiting the effects of higher borrowing costs on economic activity and employment.
Attention will also turn to Federal Reserve Chair Kevin Warsh’s comments following the announcement.
Investors are seeking indications of whether the anticipated increase would be a one-off adjustment or the first move in a broader tightening cycle. Warsh has previously opposed providing detailed forward guidance on interest rates.
Brent and WTI Fall but Remain Above $100
Oil futures declined after US inventory data showed an unexpectedly large increase in crude stocks.
At 07:06 GMT, Brent futures were down 1.2% at $107.47 a barrel. West Texas Intermediate futures fell 1.8% to $103.94.
Despite Wednesday’s declines, both benchmarks had risen by at least 5% over the preceding week as disruptions to Middle Eastern oil infrastructure and shipping affected supply expectations.
Attacks by Iran-backed Houthi militants prompted Saudi Arabia to close an east-west pipeline that had provided an alternative route for crude exports bypassing the Strait of Hormuz.
The country also suspended loading operations at Yanbu. Reuters reported that Saudi Arabia had offered additional cargoes to Asian refiners through ship-to-ship transfers near Sohar, Oman.
The Houthis’ expanded control over parts of western Yemen has added to concerns about the Bab el-Mandeb Strait, another important route for international oil shipments.
Meta CEO Addresses AI Safety Debate
Meta (NASDAQ:META) Chief Executive Mark Zuckerberg called for independent evaluations of artificial intelligence systems rather than a general slowdown in their development.
In a social media post on Tuesday evening, Zuckerberg argued that user alignment and trust would become increasingly important competitive factors for AI models and agents.
He also disclosed that Meta had postponed the release of its latest Muse model to address safety and security matters.
The comments followed an essay by Anthropic Chief Executive Dario Amodei advocating slower AI development because of potential risks.
According to the supplied report, OpenAI Chief Executive Sam Altman and xAI head Elon Musk supported Amodei’s position.
Nvidia Chief Executive Jensen Huang expressed a different view on the safety debate, while President Trump emphasised competition between the United States and China in artificial intelligence.
OpenAI Reportedly Considers Financing at $1.2 Trillion Valuation
OpenAI has discussed a potential funding round that would value the company at $1.2 trillion, The Wall Street Journal reported, citing a person familiar with the discussions.
The proposed financing would take place before a potential initial public offering. The report did not establish that an agreement had been reached or provide a confirmed listing date.
Altman has ruled out an IPO this year, citing AI safety concerns.
OpenAI previously completed a $122 billion financing round in March at a valuation of $852 billion, with SoftBank, Amazon and Nvidia among the participants.
The company has reported one billion active users and said more than 200 million businesses use its AI products.
The Journal reported that OpenAI’s revenue increased to $6.7 billion in the three months to June from $5.7 billion in the first quarter.
However, the report said a decline in operating margin had affected expectations that OpenAI could become profitable before a potential public listing.
The reported financing discussions remain preliminary, and the valuation would depend on the terms of any completed transaction.
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