U.S. stock futures were largely flat Wednesday as investors awaited a key Federal Reserve interest rate decision. While the majority of market participants expect a cut in borrowing costs, uncertainty remains over its size and the Fed’s broader economic outlook. Meanwhile, U.K. inflation stayed steady, and packaged foods leader General Mills (NYSE: GIS) is set to report first-quarter results.
Futures Show Little Movement
By 03:30 ET, Dow, S&P 500, and Nasdaq 100 futures were mostly unchanged, with Nasdaq 100 futures nudging up 19 points, or 0.1%. Wall Street’s major indices had fallen in the prior session, and the U.S. dollar slipped to new 52-week lows, signaling caution ahead of the Fed announcement.
Corporate news saw Nvidia (NASDAQ: NVDA) shares slide following reports of weak demand for its new AI chip in China. Conversely, Oracle (NYSE: ORCL) advanced amid speculation the company is part of a consortium that will maintain the U.S. operations of TikTok under a U.S.-China framework deal.
Fed Rate Decision in the Spotlight
The Federal Reserve is expected to lower rates after its two-day policy meeting. Markets are pricing in at least a 25 basis point cut from the current 4.25%-4.5% target range, though some traders are considering a larger 50 basis point reduction.
Signs of a softening labor market in the U.S. are counterbalanced by persistent inflation, creating a delicate balancing act for policymakers. The Fed’s updated “dot plot” projections and comments from Chair Jerome Powell will be closely watched for insights into future monetary policy.
“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,” said ING analysts in a note.
U.K. Inflation Steady in August
U.K. consumer price inflation held at 3.8% in August, nearly double the Bank of England’s 2% medium-term target. The monthly rate rose 0.3%, faster than July’s 0.1%, while core inflation, which excludes food and energy, increased 0.3% month-on-month and 3.6% year-on-year. The figures suggest the Bank of England is likely to leave interest rates unchanged at Thursday’s policy meeting.
General Mills Earnings Preview
General Mills is scheduled to report before the U.S. open. Investors will focus on sales trends and guidance amid concerns that tariffs and economic uncertainty may curb consumer spending. Analysts expect first-quarter adjusted EPS of $0.82 on $4.52 billion in net sales for the maker of Chex cereal and Nature Valley granola bars. Shares are down roughly 22% so far this year.
Commodities Update
Gold prices retreated slightly from record levels, with spot gold down 0.6% at $3,667.61 an ounce by 03:30 ET, following a peak of $3,702.95 on Tuesday. U.S. December futures fell 0.6% to $3,704.20/oz.
Oil prices also edged lower, giving back some of the previous session’s gains amid concerns about potential disruptions to Russian production. Brent and WTI crude had risen over 1% on Tuesday, fueled in part by fears of supply disruptions following Ukrainian drone strikes on key export ports and refineries.
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