© Reuters
Investing.com -- U.S. stocks are seen opening marginally higher Wednesday, bouncing after the previous session’s hefty losses as investors await the Federal Reserve’s latest policy decision.
At 06:45 ET (10:45 GMT), the Dow Futures contract was up 50 points, or 0.2%, S&P 500 Futures traded 10 points, or 0.2%, higher and Nasdaq 100 Futures climbed 30 points, or 0.2%.
The main indices closed sharply lower Tuesday, their second straight losing session, as investors fretted about the health of the country’s banking system in the wake of the collapse of First Republic Bank, the third regional lender to go under in the last couple of months.
The blue chip Dow Jones Industrial Average closed over 360 points, or 1.1%, lower, while the broad-based S&P 500 dropped 1.2% and the tech-heavy Nasdaq Composite 1.1%.
The main focus will be on the conclusion of the two-day meeting of the Federal Open Market Committee, with the latest interest rate decision due at 14:00 ET, to be followed 30 minutes later by a press conference featuring Chair Jerome Powell.
The U.S. central bank is widely expected to raise interest rates by 25 basis points once more in its year-long battle against inflation, and so it's the forward guidance that people are interested in.
Inflation remains elevated but expectations are growing that the Fed will signal a pause of its rate hikes at its next meeting in June while it takes a look at the impact of its tightening actions to date, particularly given the weakness of the regional banking sector.
There is more labor data due Wednesday before the Fed announcement in the form of ADP private payrolls, which will be studied carefully as a precursor to Friday’s official jobs report.
Investors will also be looking for any news on the potential lifting or suspension of the country’s debt ceiling, as the June deadline Treasury Secretary Janet Yellen warned about earlier this week draws nearer.
In corporate news, Advanced Micro Devices (NASDAQ:AMD) stock fell over 7% premarket after the chipmaker provided a tepid forecast for the current quarter as it adjusts to a severe PC slowdown.
Starbucks (NASDAQ:SBUX) stock dropped 5% premarket after the coffee chain beat quarterly profit expectations, powered by a sharp recovery in business in China, but it chose not to lift its 2023 guidance.
More earnings are due from the likes of CVS Health (NYSE:CVS), Yum! Brands (NYSE:YUM), Qualcomm (NASDAQ:QCOM) and Spirit AeroSystems (NYSE:SPR).
Oil prices continued to weaken Wednesday, falling to their lowest levels since mid-March, ahead of the likely interest rate hike by the Fed and despite a bigger-than-expected fall in U.S. crude stockpiles.
Data from the industry body American Petroleum Institute, released on Tuesday, showed U.S. oil inventories stockpiles fell for a third week in a row for the first time since December.
The official data from the Energy Information Administration is due later in the session, but this generally supportive news has made little impression on a market fretting about the likely impact on economic activity, and thus crude demand, of another U.S. interest rate hike.
By 06:45 ET, U.S. crude futures traded 2.9% lower at $69.54 a barrel, while the Brent contract dropped 2.8% to $73.23.
Additionally, gold futures rose 0.1% to $2,025.90/oz, while EUR/USD traded 0.4% higher at 1.1037.
