U.S. stock index futures were little changed early Wednesday, pointing to a muted opening as investors brace for the Federal Reserve’s policy announcement later in the day. The cautious mood mirrors Tuesday’s lackluster action, when major averages ended slightly lower after early gains faded.
Market participants are largely in wait-and-see mode ahead of the Fed’s decision, where a quarter-point rate cut is widely expected. According to CME Group’s FedWatch tool, traders are pricing in a 94% probability of a 25 basis-point reduction and only a 6% chance of a larger half-point move. The central bank is also anticipated to trim rates again in October and December, though Chair Jerome Powell is expected to emphasize that future adjustments will remain data-dependent.
Tech heavyweight Nvidia (NASDAQ:NVDA) could pressure sentiment at the open, with shares down 1.6% in pre-market trading. The stock slid after a Financial Times report revealed that China’s internet regulator has instructed leading domestic tech firms to halt purchases of Nvidia’s AI chips.
On Tuesday, the Nasdaq and S&P 500 briefly touched fresh intraday records before drifting sideways for most of the session. By the close, the Dow had slipped 125.55 points, or 0.3%, to 45,757.90. The Nasdaq eased 14.79 points, or 0.1%, to 22,333.96, while the S&P 500 dipped 8.52 points, or 0.1%, to 6,606.76.
The subdued trading came as the Fed kicked off its two-day policy meeting, leaving traders hesitant to take on major positions. A strong U.S. retail sales report failed to spark much enthusiasm. The Commerce Department said August sales climbed 0.6%, double July’s revised pace and far above forecasts for just a 0.2% increase.
Sector moves were mixed. Gold miners retreated, with the NYSE Arca Gold Bugs Index falling 2.3% despite a modest uptick in bullion prices. Utilities were also under pressure, as the Dow Jones Utility Average dropped 1.6%. Energy stocks, however, bucked the trend—jumping higher alongside crude oil prices, lifting both the NYSE Arca Oil Index and the Philadelphia Oil Service Index by 2.2%.
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