US pre-open: Futures flat as markets brace for Fed decision

(Sharecast News) - US stock futures were flat on Wednesday as traders awaited cautiously for the Federal Reserve's latest policy decision, with the central bank widely expected to cut rates in an effort to stimulate the economy. By 0748 ET, futures on the Dow were flat, while the S&P 500 and Nasdaq were trading around 0.1% lower.

"US stock index futures were little changed overnight, but with a slightly lower bias, reflecting calm before a possible storm," said David Morrison, senior market analyst at Trade Nation.

"Investors appeared reluctant to take on fresh exposure ahead of the Fed's rate call and updated policy outlook. But on the other hand, there was no significant evidence of much profit-taking, despite the major indices holding near record highs, and uncertainty over the Fed's rate cutting path for this year and beyond."

The Federal Open Market Committee meeting is expected to announced its policy decision at 1400 ET, with a 25-basis point cut in the Federal Funds Rate all but certain. The expectation, according to consensus forecasts, is for two further 25bp cuts before the year-end, to take the FFR to the 3.5-3.75% range.

The yield on a 10-year US Treasury was down 1.7bp at 4.018% before the opening bell, while the US Dollar Index was little changed at 96.76, nearing its lowest level since the start of 2022.

In other news, markets will be keeping an eye on US building permits and housing starts data, due out at 0830 ET.