Futures tied to S&P 500 and Nasdaq 100 edged upwards as investors await the Federal Reserve's decision for key lending rates later on Wednesday. Dow Jones Industrial Average remained steady after a record close in the previous session.
S&P 500 rose 0.11% to 7,527, while tech-heavy Nasdaq recovered from a tech rout and rose 0.6% to 30,153.75. Dow Jones remained flat at 52,056.
This will be the first Fed Federal Open Market Committee (FOMC) meeting under new Chair and President Donald Trump's pick, Kevin Warsh. The Fed is expected to keep interest rates unchanged at the end of its key June 16-17 gathering.
Analysts at UBS Global Wealth Management expect the Fed to adopt a more hawkish tone amid a spike in inflation due to rising gas prices and Iran war induced energy disruption.
The analysts believe that interest rates will be on hold through 2026. UBS now forecasts two 25-basis-point reductions in March and June 2027. Other analysts also expect the Fed to leave the rates unchanged, Reuters reported.
The meeting comes after the US President Donald Trump announced a preliminary agreement with Iran to end their conflict. This has eased geopolitical concerns and provided some support to global financial markets.
On Tuesday, Wall Street had closed on a split note, with big tech and chip stocks draggin Nasdaq Composite 1.15% lower to 26,376.34. S&P 500 also ended in the red 0.57% lower at 7,511.35, whereas Dow Jones added over 300 points to have another record closing at 51,999.67.
ALSO READ: Market 'Very Happy' With Iran Deal, Says Trump; Sees Oil Sliding Below Pre-War Levels
What To Expect From Warsh?
The new Federal Reserve chair is expected to gradually reshape the central bank's communication strategy. Warsh has long criticised detailed forward guidance on interest rates. According to Reuters, Warsh argued that it limits the Fed's flexibility when economic conditions change.
Reuters report added that under Warsh, Fed may remove language suggesting future rate cuts, reflecting both Warsh's preferences and the possibility of rate hikes later this year.
Warsh has also expressed concerns that the Fed communicates too much through press conferences, economic projections, and frequent speeches by policymakers. It remains to be seen if he will be able to introduce these changes to the existing format of how the institution functions.
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