Dow and Nasdaq stock set for another mixed open ahead of Fed decision
US market liveblog: stocks set for mixed open ahead of Fed decision
US stocks are set for a mixed open on Wednesday as investors look ahead to the Federal Reserve’s latest interest-rate decision, while renewed tensions in the Middle East and continued pressure on semiconductor stocks cloud the mood.
Ahead of the opening bell, Dow Jones futures were down 186 points, or 0.35%, while S&P 500 futures were 0.16% higher and Nasdaq 100 futures were up 0.14%.
The cautious start follows a divided session on Wall Street. The S&P 500 gained 0.2% to 7,429, while its equal-weighted counterpart climbed 1.1% to a record high as a sharp fall in oil prices supported the broader market. The Dow Jones also climbed 537 points or 1% to close at 52,747.
However, the Nasdaq slipped 0.2% to 24,877 as chip stocks remained under pressure, with the Philadelphia Semiconductor Index tumbling 4.5%.
Oil prices rebounded overnight after the US said it intercepted an Iranian attack against American bases in the Middle East, ending a pause in the fighting.
Iranian state media said the missiles were launched in response to “aggressive US actions”, while the Revolutionary Guards said they targeted three tankers in the Strait of Hormuz.
WTI crude rose 4.7% to around $83 a barrel, having fallen below $79 on Tuesday afternoon. The global Brent benchmark had dropped 16.5% over the previous three sessions – its steepest three-day decline since April 2020.
The chip selloff intensified in Asia. South Korea’s Kospi plunged 8.7% after an 11% fall the day before, with SK Hynix tumbling 16.5% after a sixfold jump in quarterly profit was short of expectations. Samsung dropped 11% ahead of its results.
European markets have been mixed, with the FTSE 100 and DAX higher but the CAC 40 and IBEX in negative territory.
The FOMC decision and accompanying commentary will dominate later trading as investors assess the outlook for rates against volatile energy prices and signs of strain in highly valued technology stocks.
The CME’s FedWatch tool indicates that there is a 30% chance of a rate hike at the meeting.
“The question is, will new chair Kevin Warsh spring a ‘surprise’ hike on financial markets,” said analyst Kathleen Brooks at XTB.
“The Fed Fund Futures market thinks that there is a decent chance that the Fed will embark on a preemptive rate hike to address potential inflation risks ahead of time. But is the market right to think this?”
A rate hike “would not be grounded in the current labour market or inflation readings,” she said, with such a potential decision “rooted in risk management”.