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US stocks are set for a cautious start on Wednesday as investors await the first Federal Reserve interest rate decision under new chair Kevin Warsh. The focus is less on the immediate policy outcome and more on the route forward.
Futures point to a flat open for the Dow Jones and the S&P 500, while the Nasdaq is expected to rebound by 0.5% after the tech-heavy exchange posted the sharpest losses in a mixed Wall Street session on Tuesday.
The Nasdaq slid almost 2% and the S&P 500 fell 0.9% as semiconductors and other technology shares came under pressure. The Dow rose 0.6% to finish just shy of 52,000 and reached an intraday high during the session.
Attention is now on the Fed’s quarterly meeting, which will be accompanied by updated economic forecasts and the closely watched “dot plot” showing policymakers’ interest-rate expectations.
There is speculation that this could be the last meeting of its kind, with Warsh suggesting in recent comments that he would eventually favor a less transparent approach to communications.
Markets are widely expecting rates to remain unchanged. Traders are instead looking for clues on whether policymakers still see scope for cuts later this year.
According to CME FedWatch, futures markets currently imply around a 60% chance of at least one rate cut before year-end.
SpaceX continued to rise, gaining 4.8% on Tuesday and lifting its market value above Amazon. The stock added a further 1.3% in pre-market trade on Wednesday.
Investors are still weighing the company’s valuation, with index inclusion and a limited free float continuing to support demand.
For a more upbeat take on the technology sector, Wedbush analyst Dan Ives argued that fears SpaceX’s blockbuster IPO would “suck oxygen out of the tech and AI trade” have been overblown.
Ives described the market debut as a “Goldilocks outcome” for the sector and said investors should treat concerns about an IPO-driven sell-off in chip stocks as a “rear-view mirror concern.”
