US pre-open: Stocks seen flat to lower as investors eye Fed; Facebook weak again
US futures pointed to a flat to slightly lower open on Wall Street on Wednesday as investors awaited the latest policy announcement from the Federal Reserve.
At 1130 GMT, Dow Jones Industrial Average and S&P 500 futures were flat, while Nasdaq futures were 0.3% weaker.
The Fed rate announcement is due at 1800 GMT, along with a speech from chair Jerome Powell and the FOMC's economic projections. Before that, existing home sales are scheduled for release at 1400 GMT.
With the Fed widely expected to hike rates by 25 basis points, the focus will be on the dot plot projections to see how many more rate increases are on the cards this year.
Craig Erlam, senior market analyst at Oanda, said a hike is 94% priced in according to CME Group, so any reaction to this could be relatively muted.
"What will be of much more interest to investors is the economic projections which, aside from offering updated growth and inflation forecasts, will offer crucial insight into how policy makers see interest rates moving.
"The central bank had previously indicated - back in December - that it saw three rate hikes this year but since then Trump’s tax reforms have provided an additional tailwind for the economy, one that could lift inflationary pressures and force the central bank to tighten at a slightly faster pace. The comments that we’ve had from some policy makers since then suggest some are now anticipating a fourth rate hike this year, which should be reflected in the dot plot. How many now fall into that camp will determine how markets respond.
"As it is, markets are already pricing in around three rate hikes this year - 79% priced in according to CME Group - so they’re pretty much on the same page as the central bank. A number of policy makers forecasting a fourth may lift this a little as that is only 39% priced in but it may not make a huge difference so any dollar upside could be both limited and short-lived."
On the corporate front, General Mills was set for a down day after it posted third-quarter earnings per share of $1.62 versus 61 cents a year ago, as the company's chief executive said he was "disappointed" with revenue.
Motor homes manufacturer Winnebago rose in pre-market trade after it second-quarter numbers, but Salesforce fell after confirming the acquisition of San Francisco-based software company Mulesoft in a $6.5bn deal.
Boston Scientific was likely to be in focus after agreeing to buy Minnesota-based NxThera for up to $406m.
Southwest Airlines looked set to fly lower later after cutting its outlook for first-quarter revenue per available seat mile.
Elsewhere, Facebook was on track for another day of losses in the wake of the latest data scandal with Cambridge Analytica.
Biotech company Proteostastis Therapeutics was sharply higher, however, after saying late on Tuesday that it was cancelling its proposed equity offering due to market conditions.