US stock market: Wall Street seen opening steady as investors await Fed policy outcome

Mint

2 days ago

US stock index futures pointed to a steady open on Wednesday as investors remained cautious ahead of the Federal Reserve's policy decision due later in the day. Markets largely expect the Fed to hold interest rates steady while providing cues on the timing of future cuts.
Apart from the Fed outcome, investors are also awaiting earnings reports from two 'Magnificent Seven' firms—Meta Platforms and Microsoft. Stronger-than-expected growth in the U.S. economy did little to shift investor focus away from interest rates and corporate earnings.
The Commerce Department reported that the U.S. economy grew at a 3% annualized rate in the second quarter, largely driven by strong consumer spending. Separately, the ADP National Employment report showed private payrolls rose by 104,000 in July, surpassing estimates of a 75,000 increase.
Fed funds futures are pricing in a nearly 98% probability that the central bank will keep its key rate unchanged at 4.25%–4.5%, according to CME Group's FedWatch tool. However, Fed Chair Jerome Powell could face dissent from colleagues who believe it is time to provide more support to a slowing labor market.
The Federal Reserve may see a rare split vote, with Trump-appointed governors Christopher Waller and Michelle Bowman reportedly likely to dissent against Powell's decision to hold rates steady. If both dissent, it would mark the first multi-governor opposition since 1993, according to a Wall Street Journal report.
Following the decision, traders will closely watch Powell's press conference for insights into the Fed's policy path. This comes as President Trump and his allies continue pressuring the central bank to lower borrowing costs.
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