U.S. stock futures showed little movement Wednesday as investors positioned themselves ahead of a key Federal Reserve interest rate announcement. While markets widely expect a rate cut, debate continues over its magnitude and the Fed’s broader outlook. Meanwhile, U.K. inflation held steady, and packaged foods giant General Mills (NYSE:GIS) is set to report quarterly results.
Muted Futures Ahead of Fed Announcement
At 03:30 ET, Dow, S&P 500, and Nasdaq 100 futures were largely unchanged, with Nasdaq 100 futures up slightly by 19 points, or 0.1%. Wall Street indices had retreated in the previous session, and the U.S. dollar slid to fresh 52-week lows, reflecting investor caution ahead of the Fed decision.
On the corporate front, Nvidia (NASDAQ:NVDA) shares fell after reports suggested weaker-than-expected demand for its new AI chips in China. Conversely, Oracle (NYSE:ORCL) gained amid rumors the company is part of a consortium set to keep the U.S. operations of short-form video platform TikTok running under a U.S.-China framework agreement.
Fed Rate Decision in Focus
The Federal Reserve is widely expected to lower interest rates at the close of its two-day policy meeting. Most analysts anticipate a 25 basis point reduction from the current 4.25%-4.5% range, while a smaller number of traders are considering the possibility of a larger 50 basis point cut.
Recent data suggesting a softening U.S. labor market contrasts with ongoing signs of persistent inflation. A rate cut could encourage investment and hiring but may also risk higher prices. Investors will closely monitor the Federal Open Market Committee’s commentary and updated rate projections, commonly known as the “dot plot,” for insights into future policy direction.
“Inflation remains above target and tariffs are likely to keep it elevated in the near term, but the balance of risks are tilted towards the need for more support for the economy,” analysts at ING noted.
U.K. Inflation Steady
In the U.K., consumer price inflation remained at 3.8% in August, nearly double the Bank of England’s 2% target, indicating the central bank is likely to hold rates steady at Thursday’s meeting. Monthly inflation rose 0.3%, faster than July’s 0.1% increase, while core CPI, which excludes food and energy, grew 0.3% month-on-month and 3.6% annually.
General Mills Earnings Preview
General Mills is scheduled to release first-quarter results before the U.S. market opens. Investors will monitor sales trends and outlook for consumer demand amid economic uncertainty and tariff-related concerns. Bloomberg consensus expects the packaged foods company, known for brands such as Chex and Nature Valley, to report adjusted EPS of $0.82 on $4.52 billion in net sales. Shares have declined roughly 22% year-to-date.
Commodities Update
Gold prices pulled back slightly from record highs, with spot gold down 0.6% at $3,667.61 an ounce by 03:30 ET, after reaching $3,702.95 on Tuesday. U.S. December gold futures also fell 0.6% to $3,704.20/oz.
Meanwhile, oil prices edged lower, giving back some of Tuesday’s gains amid concerns about potential disruptions to Russian production. Both Brent and WTI crude had risen over 1% the previous session, driven in part by worries over Ukrainian drone attacks on key export ports and refineries.
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