Fed to keep rates unchanged between 3.75% and 4.0%, eyeing Chair Kevin Warsh's outlook.
Wall Street awaits Alphabet and Microsoft results after Wednesday's close to gauge AI trade momentum.
Tech gains boosted stocks on Tuesday, led by Broadcom's $63B financing deal, Meta's offering, and Oracle's partnership.
Dow Jones futures decline by 0.22% to trade near 52,460 during European hours on Wednesday. S&P 500 futures gain 0.08% to trade around 7,760, while Nasdaq 100 futures rise 0.45% to trade near 29,950.
US stock futures posted mixed results as investors braced for the upcoming Federal Reserve (Fed) policy decision and high-stakes earnings reports from megacap technology leaders. Focus centers heavily on corporate results, with Alphabet and Microsoft set to report after Wednesday's market close. Investors will be closely dissecting these figures to gauge the underlying health and trajectory of the artificial intelligence trade.
Monetary policy also remains top of mind, with the Federal Reserve widely expected to maintain its benchmark interest rate within the current 3.75% to 4.0% target range. Market pricing via the CME FedWatch tool currently reflects a 90.6% probability of a rate hold at this meeting, alongside an 84.3% chance of a rate hike in December. Market participants will be tuning in closely to Federal Reserve Chair Kevin Warsh's upcoming press conference for any subtle indications regarding the central bank's broader economic outlook.
The cautious positioning follows a positive regular trading session on Tuesday, where technology gains lifted major benchmark indices. The Dow Jones Industrial Average edged up 0.03%, while the S&P 500 and Nasdaq Composite advanced 0.6% and 1.18%, respectively. Momentum was primarily driven by chipmakers after Broadcom disclosed that a bank consortium would provide $63 billion in financing linked to Anthropic's deployment of its technology. Elsewhere across the tech sector, Meta’s $25 billion share offering saw strong demand, finishing five times oversubscribed, while Oracle further expanded its strategic partnership with OpenAI.
Tech-led gains underscore resilience in US equities
Analysts at Deutsche Bank highlight that “the strong data yesterday also added to the resilience of US equities, which were already advancing amidst a continuing buoyant tech mood.” They note that the rally was led by chips, with “the Philly semiconductor index (+3.60%)” posting “a big gain,” while “the Nasdaq (+1.18%) and the Mag-7 (+0.94%) also marched higher.” Within tech, Deutsche Bank points to “notable tech moves” from “CoreWeave (+7.94%), Nvidia (+0.90%), and Broadcom (+4.00%),” underscoring how AI and semiconductor names remain at the forefront of the latest leg higher.
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