Futures tread water as investors await Fed decision

NEW YORK: Wall Street was set for a lackluster open on Wednesday as investors awaited the conclusion of the Federal Reserve's meeting where it is widely expected to keep interest rates unchanged and provide cues on its monetary policy trajectory. U.S. central bankers will conclude their two-day meeting later in the day. Focus will be on the Fed's policy statement, updated economic projections and Chair Jerome Powell's press conference.

Wall Street rallied to all-time highs this month, supported by optimism around artificial intelligence, but it has retreated a little in recent weeks after reports showing robust inflation shook confidence in the Fed kicking off its rate-easing cycle soon. Traders pulled back bets for a June rate cut to 64% from 71% at the start of last week, according to CME FedWatch data.

"The two things that the markets will be focused on are will there be a change in forecasts and also will there be a change in the tone," said Michael Metcalfe, head of macro strategy at State Street Global Markets. "Given the mistakes in the past that the Fed has made with transitory (language), you can understand why they might not want to comment on just one data release but we have January and February with slightly concerning signs about the inflation trend, so there'll be a focus on whether he (Powell) mentions it."

At 08:02 a.m. ET, Dow e-minis were down 25 points, or 0.06%, S&P 500 e-minis were up 3.25 points, or 0.06%, and Nasdaq 100 e-minis were up 54.5 points, or 0.3%. Most megacap growth stocks edged higher in premarket trading, while Tesla gained 0.8% after confirming to Reuters it will raise the price of China-produced Model Y vehicles by 5,000 yuan ($694.55) from April 1.

The Biden administration said it is awarding Intel nearly $20 billion in grants and loans, lifting shares of the chipmaker up 3.4%. Nasdaq's shares fell 2.4% after the exchange operator said Borse Dubai will sell shares worth $1.6 billion in the company, reducing its stake to 10.8% from 15.5%.

Wells Fargo shed 0.8% after Citigroup downgraded its rating on the lender to "neutral" from "buy". Boeing eased 1.7% after CFO Brian West said the planemaker has decided to keep 737 jet production below 38 per month.

PDD Holdings jumped 15.3% after the e-commerce company beat Wall Street estimates for fourth-quarter revenue. Chipotle Mexican Grill climbed 5.6% after the company said its board had approved a 50-for-1 split of its common stock.