US stock futures fall slightly ahead of eagerly-awaited Fed decision

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Investing.com– U.S. stock index futures retreated slightly Wednesday, handing back some of the previous session’s tech-fueled gains, with focus turning squarely to the conclusion of a Federal Reserve meeting later in the day. 

By 06:35 ET (10:35 GMT), the Dow Jones Futures contract was down 35 points, or 0.1%, S&P 500 Futures traded 2 points, or 0.1%, lower, while Nasdaq 100 Futures traded marginally lower.

The main Wall Street indices closed higher on Tuesday, with renewed optimism over artificial intelligence, after market darling Nvidia (NASDAQ:NVDA) unveiled pricing and shipment details for its new line of AI chips, a key driver of gains.

The S&P 500 posted a record closing high, with gains of 0.6%, while the NASDAQ Composite rose 0.4% and the Dow Jones Industrial Average finished up 0.8%, its best day since Feb. 22.  

Fed meeting, Powell address in focus 

However, caution has set in with the Fed set to conclude a two-day meeting later in the session.

Markets broadly expecting the central bank to keep interest rates on hold, but the bank’s statement on monetary policy, along with a post-meeting press conference by Chair Jerome Powell, will be closely watched for any cues on interest rate cuts.

Hotter-than-expected inflation prints for January and February spurred fears that the Fed could trim its outlook for rate cuts in 2024, given that it has repeatedly signaled that the path of inflation will drive any loosening in monetary policy. 

Sticky inflation, coupled with recent signs of resilience in the U.S. economy, gives the Fed more headroom to keep rates higher for longer. 

Nvidia hands back some gains

In corporate news, Nvidia fell slightly premarket, having marked a series of volatile sessions, amid some doubts over whether it could meet its AI-driven ambitions even as it revealed pricing and shipment plans for its hotly anticipated Blackwell B200 chip.

The stock surged over 200% in valuation through 2023, also making it vulnerable to some profit-taking, especially as sentiment grew cautious before the Fed.

Additionally, Intel (NASDAQ:INTC) stock rose over 4% after the Biden administration announced it is awarding the company nearly $20 billion in grants and loans, as it seeks to boost the country’s chip output.

Tesla (NASDAQ:TSLA) stock rose nearly 1% after the EV manufacturer confirmed it will raise the price of China-produced Model Y vehicles from April 1, suggesting solid demand in this important market.

There will also be quarterly earnings from semiconductor Micron Technology (NASDAQ:MU) and food processing giant General Mills (NYSE:GIS) to digest.

Crude retreats ahead of Fed

Oil prices slipped lower Wednesday, retreating from four-month highs amid caution ahead of the latest Fed policy announcement. 

By 06:35 ET, the U.S. crude futures traded 0.8% lower at $82.07 a barrel, while the Brent contract dropped 0.8% to $86.72 per barrel.

Both benchmarks settled at their highest levels since late October on persistent signs of tight supplies, but a stronger dollar has seen some profit-taking as it makes oil more expensive for investors holding other currencies.

Data from the American Petroleum Institute, released on Tuesday, showed that U.S. crude inventories shrank 1.5 million barrels in the week to March 22, surprising after expectations for a small build. 

The reading potentially marks a second straight week of draws in U.S. inventories, if confirmed by the official data, from the Energy Information Administration later Wednesday. 

(Ambar Warrick contributed to this article.)