U.S. stock index futures are pointing to a largely flat open on Wednesday, suggesting markets may struggle to find direction following the previous session’s pullback.
Investors appear cautious ahead of the Federal Reserve’s latest policy decision due later in the day.
According to CME Group’s FedWatch Tool, markets are pricing in a 100% probability that the Fed will keep interest rates unchanged for a third consecutive meeting.
With the outcome widely expected, attention is likely to shift to the central bank’s statement for signals on the future path of rates. Still, given the Fed’s tendency to avoid detailed forward guidance, focus may instead turn to earnings from major technology companies.
Alphabet Inc. (NASDAQ:GOOGL), Amazon.com Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT) are all set to report results after the market close.
As members of the so-called “Magnificent Seven,” their earnings could significantly influence sentiment, particularly as concerns around AI-related spending re-emerge.
Meanwhile, markets have largely brushed aside another spike in oil prices, even as U.S. crude futures climbed above $100 per barrel following fresh threats toward Iran from President Donald Trump.
“Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!” Trump wrote on Truth Social, alongside an image of himself holding a rifle and the phrase “No more Mr. Nice Guy!”
Previous Session Recap
After a mixed and volatile Monday, U.S. equities moved mostly lower on Tuesday, with all major indices finishing in negative territory. The tech-heavy Nasdaq saw the sharpest decline.
The Nasdaq Composite dropped 223.30 points, or 0.9%, to 24,663.80. The S&P 500 fell 35.11 points, or 0.5%, to 7,138.90, while the Dow Jones Industrial Average slipped 25.86 points, or 0.1%, to 49,141.93.
The Nasdaq retreated from its recent record close as AI-linked stocks came under pressure following a report by The Wall Street Journal indicating that OpenAI had fallen short of internal targets for user growth and revenue.
According to sources cited by the WSJ, the shortfall has raised concerns within the company about whether it can sustain its heavy investments in data center infrastructure.
Oracle Corporation (NYSE:ORCL), a key partner in OpenAI’s infrastructure buildout, dropped 4.1%.
Semiconductor stocks also came under pressure, with Broadcom Inc. (NASDAQ:AVGO), Advanced Micro Devices Inc. (NASDAQ:AMD), and NVIDIA Corporation (NASDAQ:NVDA) all posting notable losses.
Oil Surge and Geopolitical Tensions
Rising oil prices added to market concerns, with U.S. crude futures briefly topping $100 per barrel before easing.
Prices have climbed sharply in recent sessions due to ongoing tensions between the U.S. and Iran.
The latest rally follows signs that Trump is unlikely to accept Iran’s proposal to reopen the Strait of Hormuz and end the conflict while postponing nuclear negotiations.
In another Truth Social post, Trump claimed Iran is in a “state of collapse” and is eager to reopen the Strait of Hormuz as it navigates internal leadership challenges.
CNN reported that Iran is preparing a “revised proposal,” with mediators in Pakistan awaiting the updated plan.
Sector Moves
Gold-related stocks fell sharply as bullion prices dropped, with the NYSE Arca Gold Bugs Index plunging 4.6%.
Semiconductor shares also saw heavy selling, dragging the Philadelphia Semiconductor Index down 3.6%.
Additional weakness was seen in computer hardware, networking, and airline stocks, while energy names, particularly oil and gas companies, moved higher.