U.S. stock futures were stuttering on Wednesday as investors awaited a widely expected interest-rate cut from the Federal Reserve.
Futures tracking the Dow Jones Industrial Average were broadly flat, after the index retreated 279 points on Tuesday to finish at 47,560. S&P 500 futures rose less than 0.1% with contracts tracking the tech-heavy Nasdaq also less than 0.1% higher.
The yield on the benchmark 10-year U.S. Treasury note hovered at 4.18%.
An interest-rate decision is due from the Federal Reserve at 2:00 p.m. Eastern time. The start of the central bank’s two-day monetary policy meeting on Tuesday saw stocks stagnate, with the S&P 500 losing 0.1%.
The odds that the Fed cuts rates by a quarter-point on Wednesday stand at near 90%, based on futures contracts tracking the Fed funds rate.
Fed Chair Jerome Powell will deliver a speech and answer questions following the rate decision in a press conference that will be scrutinized over what it says about the path ahead for borrowing costs.
“We expect this to be a hawkish cut, with the Fed likely to signal that additional rate cuts are not likely in the near-term,” Chris Brigati, chief investment officer at investment firm SWBC, wrote in a note. “The Fed is divided on how to proceed with rate cuts in 2026 given the delicate balance between job market weakness and still elevated inflation.”
The Fed will also release its quarterly Summary of Economic projections, which investors may focus on more than usual given a recent period of irregular economic statistics due to the government shutdown.
How Fed officials see the state of the U.S. economy will be central to considerations of how much further interest rates could fall in 2026.
“The economic data in recent months, while infrequent and on an extreme lag given the disruptions for the government shutdown, suggest that the labor market is cooling, but not as much as feared, and that inflation is still above the Fed’s target,” said Brigati. “While this warrants another rate cut, it may not warrant many in 2026.”