Kanchana Chakravarty and Sukriti Gupta
2 min read
By Kanchana Chakravarty and Sukriti Gupta
(Reuters) -U.S. stock index futures were muted on Wednesday ahead of the Federal Reserve's monetary policy decision, as investors traded cautiously amid the raging Israel-Iran conflict that entered its sixth day.
A Federal Reserve monetary policy decision is due at 02:00 p.m. ET, where policymakers are widely expected to leave interest rates unchanged at the 4.25%-4.5% range.
Investors will focus on Fed Chair Jerome Powell's comments to gauge how he plans to combat the risk of rising prices, which remain a dominant concern for the central bank. The central bank is expected to balance the risk of slowing growth and higher inflation.
"A lot has happened since their last meeting in early May ... given that uncertainty and the potential for fresh inflationary spikes, they're widely expected to keep rates on hold again," Jim Reid, global head of macro and thematic research at Deutsche Bank, said in a note.
Money market moves show traders are pricing in about 46 basis points of rate cuts by the end of 2025, with a 56% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool.
With the conflict escalating in the oil-rich Middle East, markets have been on edge over the possibility of a more direct U.S. military involvement in the Israel-Iran aerial war.
A source familiar with internal discussions said U.S. President Donald Trump and his team were considering a number of options, which included joining Israel in strikes against Iranian nuclear sites.
Oil prices fell earlier after gaining 4% in the previous session, as markets assess the chance of supply disruptions from the Iran-Israel conflict and a direct U.S. involvement.
At 06:55 a.m. ET, Dow E-minis were down 21 points, or 0.05%, S&P 500 E-minis were down 0.75 points, or 0.01%, and Nasdaq 100 E-minis were up 10.75 points, or 0.05%.
Initial jobless claims data is scheduled at 08:30 a.m. ET.
Among premarket movers, shares of stablecoin issuer Circle Internet rose 1.4% after the U.S. Senate passed a bill to create a regulatory framework for dollar-pegged cryptocurrency tokens known as stablecoins.
Scholar Rock rose 21.9% after the drugmaker said its experimental drug helped overweight patients preserve lean mass in a mid-stage trial when used in combination with Eli Lilly's weight-loss treatment.
(Reporting by Kanchana Chakravarty and Sukriti Gupta in Bengaluru; Editing by Shinjini Ganguli)
