Stock Futures Point Slightly Lower Ahead of Fed Decision on Interest Rates

Stock futures ticked lower Wednesday before the Federal Reserve’s decision on whether to trim interest rates, with financial markets overwhelmingly expecting a quarter-percentage-point cut.

Futures associated with the tech-heavy Nasdaq, blue-chip Dow Jones Industrial Average, and benchmark S&P 500 are pointing down a respective 0.2%, 0.1%, and 0.1%. Yesterday, the Dow and S&P 500 ended down 0.4% and 0.1%, respectively, while the Nasdaq finished up 0.1%.

With investors overwhelmingly expecting a reduction in the Fed funds rate, the small-cap Russell 2000 index set a new all-time high yesterday. Smaller firms tend to outperform in declining interest-rate environments, benefitting from higher profits and lower financing costs.

The Fed will announce its decision at 2 p.m. ET today, and the CME Group’s FedWatch tool indicating financial markets are pricing in a 90% likelihood the central bank will cut its key rate to a range of 3.5% to 3.75%.

The 10-year Treasury yield, which influences interest rates on a variety of commercial and consumer loans, rose to nearly 4.21% from 4.19% at Tuesday’s close.

Bitcoin was trading around $92,300, down slightly from an overnight high of $93,200. The U.S. dollar index, which tracks the value of the greenback against a basket of foreign currencies, was little changed at 99.17.

Gold futures were down 0.4% at $4,220 an ounce, while West Texas Intermediate futures, the U.S. crude oil benchmark, advanced 0.6% to $58.60 a barrel.

In corporate news, shares of GE Vernova (GEV) popped 8.5% in premarket trading after the firm lifted its outlook, doubled its dividend, and increased its buyback on robust power demand.

In post-earnings moves, shares of Cracker Barrel Old Country Store (CBRL) sank 8%, GameStop (GME) fell 6.5%, and AeroVironment (AVAV) declined 4%. Oracle (ORCL) and Adobe (ADBE) were up less than 1% and fractionally lower, respectively, ahead of their results after the closing bell.

JPMorgan Chase (JPM) shares rebounded modestly before the bell after a 4.7% decline yesterday after Marianne Lake, its CEO of Consumer & Community Banking, warned the bank’s costs would rise next year and said she “would characterize the environment as being a little bit more fragile.”