US stock futures moved higher on Wednesday as investors awaited the Federal Reserve’s interest rate decision. Oil prices declined following an unexpected increase in US inventories, while developments involving Meta and OpenAI remained in focus.
At 07:12 GMT, Dow futures were up 129 points, or 0.3%. S&P 500 futures gained 21 points, or 0.3%, while Nasdaq 100 futures advanced 145 points, or 0.5%.
Wall Street’s main indices had declined in the previous session as US government bond yields approached two-decade highs. Higher oil prices, linked to the widening conflict in the Middle East, contributed to concerns about inflation and further monetary policy tightening.
Analysts at Vital Knowledge described a feedback mechanism in which rising oil prices push bond yields higher, affect investor sentiment and increase pressure on central banks to raise interest rates.
Federal Reserve Expected to Raise Rates by 25 Basis Points
Markets broadly anticipated a 25-basis-point interest rate increase at the conclusion of the Federal Open Market Committee’s two-day meeting.
Such a move would bring the federal funds rate to a range of 3.75% to 4%.
Persistent US inflation and a resilient labour market have contributed to expectations of higher borrowing costs. President Donald Trump has advocated lower interest rates, while the Federal Reserve faces the task of balancing inflation risks against potential effects on economic growth and employment.
Investors are also awaiting comments from Federal Reserve Chair Kevin Warsh to assess whether the anticipated increase will be a standalone adjustment or the beginning of a broader tightening cycle.
Warsh has previously expressed opposition to providing detailed guidance on the future path of interest rates.
Oil Prices Decline Following Increase in US Inventories
Crude oil prices fell on Wednesday after an unexpectedly large increase in US inventories, although both major benchmarks remained above $100 a barrel.
At 07:06 GMT, Brent crude futures declined 1.2% to $107.47 a barrel, while West Texas Intermediate futures fell 1.8% to $103.94.
Both contracts had gained at least 5% over the preceding week amid disruptions to oil production and transportation linked to the Middle East conflict.
Iran-backed Houthi militants carried out attacks on Saudi Arabia, leading the country to shut down an east-west pipeline used as an alternative to shipping crude through the Strait of Hormuz.
Saudi Arabia also suspended loadings at its Yanbu port. According to Reuters, the country offered additional loadings to Asian refiners through ship-to-ship transfers near Oman’s Sohar port.
The Houthis have also expanded their control over parts of western Yemen, increasing concerns about shipping through the Bab el-Mandeb Strait.
Zuckerberg Calls for Independent AI Safety Evaluations
Meta (NASDAQ:META) Chief Executive Mark Zuckerberg said artificial intelligence developers should work with independent safety evaluators rather than broadly slowing the development of AI capabilities.
In a social media post on Tuesday evening, Zuckerberg argued that companies failing to prioritise the alignment of AI systems with users would face competitive disadvantages.
He said Meta had delayed the release of its latest Muse AI model to address safety and security considerations.
His comments followed an essay by Anthropic Chief Executive Dario Amodei calling for slower AI development because of potential risks associated with the technology.
OpenAI Chief Executive Sam Altman and xAI Chief Executive Elon Musk supported Amodei’s message, according to the source material.
Nvidia Chief Executive Jensen Huang expressed a different view on AI safety concerns, while President Trump emphasised the importance of US competitiveness with China in AI development.
OpenAI Reportedly Discusses Funding Round at $1.2 Trillion Valuation
OpenAI has held discussions about a new financing round that would value the company at $1.2 trillion, according to The Wall Street Journal, which cited a person familiar with the matter.
The potential transaction would precede an initial public offering, although no financing agreement or listing timetable was confirmed in the report.
Altman has ruled out an IPO this year, citing AI safety concerns.
OpenAI completed a $122 billion financing round in March at a valuation of $852 billion. Participants included SoftBank, Amazon and Nvidia.
The company has since reported reaching one billion active users, with more than 200 million businesses using its AI products.
According to the Journal, OpenAI generated revenue of $6.7 billion in the three months to June, compared with $5.7 billion in the first quarter.
The report also indicated that a decline in operating margin had affected expectations for the company to reach profitability before a potential stock market listing.