Wall Street Futures Edge Higher Ahead of Fed Rate Decision as Oil Prices Ease

US stock futures moved slightly higher on Wednesday as investors waited for the Federal Reserve’s September interest rate decision. The market also tracked declining oil prices, Treasury yields near 5% and fresh moves in technology stocks after two sessions of losses on Wall Street.

The Fed will announce its decision at 2 p.m. ET. Markets widely expect a 25-basis-point rate increase, which would lift the federal funds target range from 3.5%-3.75% to 3.75%-4.00%.

Fed Rate Decision Dominates Wall Street Focus

At 7:00 a.m. ET, Dow E-minis were up 115 points, or 0.22%. S&P 500 E-minis gained 0.25%, while NASDAQ 100 E-minis rose 0.50%. The figures showed a smaller gain than some earlier premarket readings, but futures remained in positive territory.

Traders priced a 92.5% chance of a quarter-point Fed rate increase, according to CME FedWatch data. This probability stood at 61.2% a week earlier. Investors will also watch Fed Chair Kevin Warsh’s press conference for information on the path of rates after September.

Recent inflation data kept rate expectations elevated. US consumer prices rose 3.4% from a year earlier in August, while monthly CPI increased 0.4%. Core inflation rose 0.3% from July. Meanwhile, higher energy costs have added pressure to the inflation outlook.

However, some investors remain unsure about the market’s rate expectations. Yung-Shin Kung, Chief Investment Officer at Mast Investments, said, “We think market pricing for a rate hike may be overly confident.”

Oil Prices Ease While Treasury Yield Holds Near 5%

Oil prices pulled back on Wednesday after sharp gains in the previous session. Brent crude fell below USD 108 a barrel in morning trade, while West Texas Intermediate traded near USD 104. The drop came after US industry data showed crude inventories rose by 7.1 million barrels in the week ended September 11.

Saudi Arabia also offered more crude cargoes through Oman after drone attacks damaged a key pipeline to the Red Sea. However, oil remained above USD 100 a barrel, while diesel prices stayed elevated as supply concerns continued across several regions.

The US 10-year Treasury yield held around the 5% level after moving above that mark on Tuesday. It briefly reached its highest level since 2007. Higher bond yields have raised borrowing costs and added pressure on stocks, especially companies that depend on heavy capital spending.

Wall Street closed lower on Tuesday. The Dow fell 0.63%, the S&P 500 lost 0.45%, and the NASDAQ Composite dropped 0.78%. S&P 500 dipped 1.3% so far in September through Tuesday’s close.

ALSO READ: US Stock Futures Slip as Treasury Yield Tops 5% Ahead of Fed Decision

Intel Leads Premarket Chip Gains

Technology stocks traded mixed before the opening bell. NVIDIA rose less than 1%, while Meta remained nearly flat. Microsoft and Apple moved slightly lower.

Intel gained more than 5%, while Marvell Technology rose nearly 2%. Intel also drew attention after a report said SK Hynix was in talks with the US chipmaker about producing memory chips in the United States. SK Hynix’s US-listed shares also moved higher.

The wider technology sector remains under watch after leading AI executives called for a slower pace of advanced model development. Investors have been assessing whether any slowdown could affect spending on chips, data centers and cloud infrastructure.

Global Stocks Edge Higher Ahead of Fed

European and Asian markets also moved higher in parts of Wednesday’s session. The STOXX 600 gained around 0.3%, while a broad Asia-Pacific share index outside Japan rose 0.6%.

Investors across major markets now await the Fed decision and Warsh’s remarks. Oil prices, Treasury yields and the Fed’s rate outlook remain the main factors guiding US stock futures before Wednesday’s opening bell.