U.S. stock futures were swinging on Wednesday following Tuesday’s negative moves. Futures of major benchmark indices were mixed.
President Donald Trump arrived in Britain on Tuesday evening for his second state visit, greeted with royal pageantry and the announcement of a multibillion-dollar U.S. technology investment in the United Kingdom.
Investors await the Federal Reserve Open Market Committee’s decision, scheduled to be announced by this afternoon.
Meanwhile, the 10-year Treasury bond yielded 4.01% and the two-year bond was at 3.50%. The CME Group's FedWatch tool‘s projections show markets pricing a 100% likelihood of the Federal Reserve cutting the current interest rates today.
| Futures | Change (+/-) |
| Dow Jones | 0.04% |
| S&P 500 | -0.01% |
| Nasdaq 100 | -0.02% |
| Russell 2000 | 0.06% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Wednesday. The SPY was down 0.012% at $659.92, while the QQQ declined 0.027% to $591.02, according to Benzinga Pro data.
Cues From Last Session
Sectors with the biggest losses on Tuesday included utilities, real estate, and information technology, contributing to a mostly lower close for U.S. stocks. Bucking the trend, consumer discretionary and energy stocks closed higher.
The Federal Reserve’s expected cut on Wednesday would be the first reduction since December 2024 as it arrives with stock market indexes hovering near all-time highs.
Positive economic data showed U.S. retail sales rose 0.6% month-over-month in August, topping expectations, while U.S. industrial production rose 0.1%, beating forecasts for a decline. The NAHB/Wells Fargo Housing Market Index came in steady at 32.
In company news, Dave & Buster's Entertainment Inc. (NASDAQ:PLAY) posted weaker-than-expected results for its second quarter.
The Dow Jones index ended 126 points or 0.27% lower at 45,757.90, whereas the S&P 500 index fell 0.13% to 6,606.76. Nasdaq Composite declined 0.066% to 22,333.96, and the small-cap gauge, Russell 2000, tumbled 0.087% to end at 2,403.03.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.066% | 22,333.96 |
| S&P 500 | -0.13% | 6,606.76 |
| Dow Jones | -0.27% | 45,757.90 |
| Russell 2000 | -0.087% | 2,403.03 |
Insights From Analysts
With stock markets near all-time highs, investors are bracing for what one expert calls “possibly the most meaningful week of the year” as the Federal Reserve prepares to announce its latest interest rate decision later today. A rate cut is widely seen as a near certainty, but the size of the cut and the central bank’s forward guidance will be critical for near-term market movements.
The consensus among experts is a 25-basis point reduction. In his weekly commentary, Professor Jeremy J. Siegel stated, “I expect a 25-basis point cut, with real potential for dissents on both sides”.
This aligns with market sentiment, as Louis Navellier noted in his daily report that bets on a larger 50-basis point cut have “faded to 2%”. Siegel concurs that the “bar for 50 is still high” , suggesting such a move would require a significant economic downturn signal, such as a “notably weak retail sales print,” which wasn’t the case in yesterday’s retail sales report.
Beyond today’s decision, market watchers are intensely focused on the Fed’s plans. Siegel believes the “dot plot, far more meaningful at this time of year with only a few meetings left, should cluster around two more cuts by year-end”.
This forecast is supported by market data showing that bets on sequential quarter-point cuts at the remaining three Fed meetings are “firm at 70%”. Siegel’s policy view is that the Fed is behind the curve, stating the federal funds rate “should already be in the low 3s--roughly 100 basis points lower than Friday’s setting--given cooling inflation and a slowing nominal economy”.
Ultimately, the market’s reaction may hinge on the tone set by Fed Chair Jerome Powell. Navellier argues that “the Fed's comments on tomorrow's rate cut will be key to near-term movements”.
If Powell signals cuts are due to “serious concerns about employment trends, there will likely be some downside volatility”. Conversely, framing the move as getting closer to a neutral rate could spark new highs.
While bears are anticipating a “‘sell the news’ event”, Navellier believes the established “‘buy-the-dip’ trend will limit the damage”. For equity investors, a 25-basis point cut paired with modest tariff effects would constitute the “‘dovish tilt’ equity investors want,” according to Siegel.
See Also: How to Trade Futures
Upcoming Economic Data
Here's what investors will be keeping an eye on Wednesday;
- August’s housing starts and building permits data will be announced by 8:30 a.m. ET.
- FOMC will release its interest-rate decision at 2:00 p.m. and Federal Reserve Chair Powell will speak at 2:30 p.m. ET.
Stocks In Focus
- General Mills Inc. (NYSE:GIS) was up 0.40% ahead of its earnings report scheduled to be released before the opening bell. Analysts estimate earnings of 81 cents per share on revenue of $4.51 billion.
- Manchester United PLC (NYSE:MANU) was down 0.12% as analysts expect it to report earnings loss of 6 cents per share on revenue of $225.80 million before the opening bell.
- Cracker Barrel Old Country Store Inc. (NASDAQ:CBRL) rose 0.55% ahead of its earnings report scheduled to be released after the closing bell. Analysts estimate earnings of 80 cents per share on revenue of $855.29 million.
- Diversified Energy Company PLC (NYSE:DEC) dropped 6.10% after disclosing a proposed secondary offering of 5,713,353 ordinary shares.
- New Fortress Energy Inc. (NASDAQ:NFE) surged 54.40% after announcing a long-term gas supply agreement with the Puerto Rican government.
- Scisparc Ltd. (NASDAQ:SPRC) popped 154.35% following news of a court-granted stay in merger proceedings with AutoMax Motors Ltd.
- Nio Inc. ADR (NYSE:NIO) advanced 3.85% following UBS's upgrade from Neutral to Buy, and its shipment of a new model to dealers contributed to the positive momentum.
- Workday Inc. (NASDAQ:WDAY) climbed 5.58% as it announced buying artificial intelligence startup Sana in a $1.1 billion deal.
Commodities, Gold And Global Equity Markets
Crude oil futures were trading lower in the early New York session by 0.45% to hover around $64.23 per barrel.
Gold Spot US Dollar fell 0.55% to hover around $3,669.70 per ounce. Its last record high stood at $3,703.23 per ounce. The U.S. Dollar Index spot was 0.11% higher at the 96.7440 level.
Asian markets closed mixed on Wednesday, as China’s CSI 300, Hong Kong's Hang Seng, and India’s S&P BSE Sensex indices rose. On the other hand, Australia's ASX 200, Japan's Nikkei 225, and South Korea's Kospi indices fell. European markets were higher in early trade.
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