U.S. stock index futures pointed to a largely unchanged open on Wednesday as investors adopted a cautious stance ahead of the Federal Reserve’s latest monetary policy announcement.
Market participants are widely expecting the central bank to leave interest rates unchanged, although some uncertainty remains over the possibility of an unexpected quarter-point increase.
According to CME Group’s FedWatch Tool, markets are pricing in a 64.2% probability that the Federal Reserve keeps rates unchanged, while assigning a 35.8% chance to a 25-basis-point hike.
Investors will also be watching closely for any guidance accompanying the policy decision, although the shorter statements introduced under Federal Reserve Chair Kevin Warsh may provide fewer indications about the future direction of interest rates.
Big Tech Earnings Also in Focus
Traders are also remaining cautious ahead of quarterly earnings reports from Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT), which are due after Wednesday’s closing bell.
The results from the two technology giants are expected to influence sentiment across the sector, particularly as investors continue to debate elevated valuations and the pace of artificial intelligence investment.
Mixed Session on Wall Street
U.S. markets delivered mixed performances on Tuesday following another day of volatile trading.
The Dow Jones Industrial Average extended its winning streak to three sessions, climbing 537.24 points, or 1.0%, to finish at 52,747.32.
The S&P 500 added 15.60 points, or 0.2%, to close at 7,428.78, while the Nasdaq Composite slipped 55.17 points, or 0.2%, ending the session at 24,876.91.
Earnings Winners Lift the Dow
The Dow outperformed after Sherwin-Williams (NYSE:SHW) surged 8.3% on stronger-than-expected second-quarter results and an improved full-year outlook.
Coca-Cola (NYSE:KO) also posted strong gains, rising 5% after reporting quarterly earnings that exceeded market expectations and increasing its guidance for the remainder of the year.
Semiconductor Stocks Extend Decline
Technology shares remained under pressure, limiting broader market gains.
The Philadelphia Semiconductor Index dropped 4.5%, marking its fourth consecutive daily decline and its lowest closing level in more than two months.
Computer hardware stocks also weakened significantly, with the NYSE Arca Computer Hardware Index falling 2.5%.
Oil services companies came under selling pressure as crude oil prices continued to decline.
Defensive Sectors Outperform
Pharmaceutical stocks were among the strongest performers, lifting the NYSE Arca Pharmaceutical Index 2.3% to a record closing high.
Telecommunications, airline and housing stocks also posted solid gains, helping offset weakness across much of the technology sector.