US stock futures edged higher on Wednesday as Wall Street tried to stabilise after two straight declines, with easing oil prices providing some relief before a pivotal Federal Reserve decision.
S&P 500 futures rose about 0.15%, Nasdaq 100 futures gained 0.3% and Dow futures were little changed.
The rebound remains tentative: the 10-year Treasury yield is still near 5%, inflation concerns have returned and investors are debating whether an expected quarter-point Fed increase will be a one-off move or the start of another tightening cycle.
5 things to know before Wall Street opens
1. The Fed decision is about what comes after the hike
Markets assign roughly a 93% chance to a 25-basis-point increase at 2 pm ET, which would be the Fed’s first hike since 2023.
The bigger test is Chair Kevin Warsh’s message on the path beyond September.
Tickmill strategist Patrick Munnelly said investors will judge whether the Fed can tighten enough to reassure the bond market without triggering another disorderly sell-off in Treasuries or stocks.
2. Oil is easing, but 5% Treasury yields remain a problem
Brent fell around 1% towards $107.50 a barrel and WTI dropped roughly 1.5% after the American Petroleum Institute reported a 7.1 million-barrel rise in US crude inventories.
MUFG analyst Soojin Kim told The Wall Street Journal the build had eased some immediate supply concerns, though Middle East disruptions remain significant.
The 10-year Treasury yield is hovering near 5%, keeping pressure on equity valuations.
3. Retail sales could move markets before the Fed
August retail sales are due at 8:30 am ET, giving traders one final read on the consumer before the opening bell.
Economists expect headline sales to rebound about 0.8% after July’s 0.6% decline, while core sales are forecast to rise 0.5%.
A stronger number could reinforce the argument that demand remains resilient enough to tolerate further tightening and push Treasury yields higher again.
4. Intel jumps on possible SK Hynix US chip deal
Intel surged more than 5% before the bell after reports that SK Hynix is in exploratory talks over producing memory chips in the US for the first time.
Options include leasing part of Intel’s delayed Ohio manufacturing site or forming a venture involving cloud companies.
SK Hynix told Investing.com that it is reviewing ways to expand manufacturing but that no decision has been made.
5. The AI trade is steadier, not settled
Nvidia edged higher in premarket trading, while Microsoft and Apple slipped slightly and Meta was little changed.
That follows a volatile stretch sparked by calls from leading AI executives for slower development of increasingly powerful systems.
JPMorgan analyst Gokul Hariharan, cited by MarketWatch, argued that AI development is unlikely to slow materially, but investors are still reassessing how much risk should be embedded in stretched technology valuations.
The post Wall Street futures surge ahead of Fed decision: 5 things to know before markets open appeared first on Invezz