U.S. stock index futures were higher Wednesday, as traders waited for the Federal Reserve's final rate decision of the year and signals on whether policymakers will take a more cautious stance in 2025.
The Fed is widely expected to reduce interest rates by 25 basis points at its meeting. The announcement is expected at 2 p.m. ET on Wednesday.
With a rate cut broadly priced in, the Fed's summary of economic projections (SEP), which includes the "dot plot" of rate projections, and comments from Chair Jerome Powell will be in focus for indications on the rate path in 2025.
"The prospect of fiscal stimulus among other promised policies by U.S. President-elect Donald Trump will, in our view, force some scaling back in expected rate cuts included in dot plot projections," ING analysts said, adding they still expected a 25 basis point cut at the meeting.
"We doubt the Fed will derail from a generally cautious stance on guidance."
Wall Street's main indexes had dipped in Tuesday's session, with the Dow notching its ninth straight daily decline, its longest losing streak since February 1978, as markets increasingly look for a more hawkish Fed next year as strong growth and persistent inflation could limit the case for steady rate cuts.
U.S. Treasury yields have ticked higher as Fed expectations change, with the 10-year yield up past 4.4%.
Most rate-sensitive megacap stocks ticked higher in premarket trading, with AI giant Nvidia up over 3% after hitting an over two-month low on Tuesday.
Tesla, meanwhile, dropped 2.8% after rising over 14% in the last three sessions.
Dow E-minis were up 89 points, or 0.2%, S&P 500 E-minis were up 14.25 points, or 0.24% and Nasdaq 100 E-minis were up 39.25 points, or 0.18%.
Still, despite some jitters over future Fed policy, stocks are on track to end the year strong with the S&P 500 up nearly 27%, the Nasdaq up nearly 34% and the Dow up over 15%.
Crypto-focused stocks slipped as bitcoin fell 2%. MARA Holdings was down 1.8% and Riot Platforms fell 2.4%.
Birkenstock edged lower after the company forecast fiscal 2025 revenue growth below market expectations.