The US stock market is bracing for a potential downturn as investors eagerly await the Federal Reserve’s interest-rate decision. Stock futures were sliding on Wednesday morning, with S&P 500 and Nasdaq 100 futures down about 0.1% and Dow Jones Industrial Average futures remaining flat.
One of the major factors contributing to the market uncertainty is the warning from luxury giant Kering, whose shares tanked 15% after predicting a significant decline in Gucci’s first-quarter sales. The company cited a slowdown in the Asia-Pacific region as one of the reasons for the expected drop in sales.
All eyes are on the Federal Reserve as traders anticipate whether the central bank will keep interest rates steady or announce a rate cut. The Fed’s latest projections for rate cuts this year, as revealed in the “dot plot,” will also be closely watched by investors.
“The Fed will most probably keep the rates unchanged today, update its dot plot, and maybe give a hint on whether they will start slowing QT,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
A clear signal of impending rate cuts from the Fed could provide a boost to risk assets like stocks. Lower rates would encourage spending, lower borrowing costs, and stimulate the economy, potentially leading to increased corporate profits.
In addition to the Fed’s decision, investors are also keeping an eye on earnings reports from companies like Micron Technology, General Mills, and Five Below. The outcome of the Fed’s meeting and Chair Jerome Powell’s press conference are expected to be the key events driving market sentiment for the day.
