By Niket Nishant and Tharuniyaa Lakshmi
Sept 16 (Reuters) – U.S. stock index futures attempted a recovery on Wednesday following a two-day slide, as lower oil prices offered some relief during a tense wait for the Federal Reserve’s interest rate decision.
The rate move, scheduled to be announced at 2 p.m., will be crucial to investor sentiment at a time when elevated Treasury yields, inflation and the escalating Middle East conflict have kept risk appetite in check.
Investors are also expected to focus on Fed Chair Kevin Warsh’s post-decision remarks for clues on the inflation outlook and the likely path of rates.
While traders see a nearly 93% chance of an increase, according to the CME FedWatch tool, uncertainty persists.
Fed Chair Warsh was picked by U.S. President Donald Trump with the expectation that he would cut interest rates. If the central bank stands pat, it could throw its credibility into question, especially as Warsh has said he remains focused on taming price pressures, analysts say.
“We think market pricing for a rate hike may be overly confident,” said Yung-Shin Kung, head and chief investment officer at Mast Investments.
A rate increase could be a weak tool to address the primary factors driving inflation, such as tariffs and the AI infrastructure buildout, he added.
At 6:50 a.m. ET, Dow E-minis were up 93 points, or 0.18%, S&P 500 E-minis rose 16.5 points, or 0.22%, and Nasdaq 100 E-minis advanced 126.75 points, or 0.44%.
The benchmark S&P 500 had fallen 1.3% so far this month, as of Tuesday’s close.
“Some market weakness shouldn’t be surprising. Drawdowns have generally occurred during periods of uncertainty about the path of policy,” wrote Brian Levitt, chief global market strategist at Invesco.
Oil prices dipped after reports that Saudi Arabia was offering additional crude cargoes via Oman eased concerns about the scale of Middle East supply disruptions.
Brent crude futures were down more than 1% at $107.47 and U.S. West Texas Intermediate crude futures fell 2.1% to $103.60.
Energy stocks were in negative territory during premarket trading. Chevron and ConocoPhillips fell 0.3% and 0.7%, respectively.
Tech stocks were mixed, with Nvidia up less than 1% and Apple flat. Microsoft and Meta fell marginally.
A joint call by top AI executives to slow down the development of the technology has clouded the outlook for the tech sector, although there is little clarity as yet on what such a slowdown would look like.
Meanwhile, Intel was up 3.5% before the opening bell, paring some gains after rising more than 5% earlier. South Korea’s SK Hynix said no plans had been confirmed regarding reported talks with Intel for making memory chips in the United States.
(Reporting by Niket Nishant and Tharuniyaa Lakshmi in Bengaluru; Editing by Joyjeet Das and Maju Samuel)
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