S&P 500 and Nasdaq futures edged higher on Wednesday, as chip stocks rebounded ahead of the first interest rate decision under new Federal Reserve Chair Kevin Warsh.
Wall Street indexes ended mixed on Tuesday, following a sharp rally earlier in the week that was driven by optimism around a U.S.-Iran peace deal that sent oil prices tumbling and eased inflation fears.
Policymakers are expected to hold interest rates unchanged at the 3.50%-3.75% range at the Federal Open Market Committee meeting on Wednesday, as they wrestle with inflation pressures from higher oil prices fueled by the Middle East war.
The U.S. central bank's decision is due at 2:00 p.m. ET, and investors will keep a close watch on the new Fed chair's first press conference for his views on inflation, unemployment and the economic outlook.
"We expect Warsh to sound noncommittal at his first press conference. Partly because it's his first press conference, and it would be a good idea to not sound too far from the committee's views," said Jefferies economist Mohit Kumar.
"If Warsh talks of (dis)inflationary pressures beyond the war, it would be a dovish signal for the market."
Traders see the Fed holding rates through much of the year, but are betting on a nearly 43% chance of a 25-basis-point rate hike in December, according to CME Group's FedWatch tool.
May retail sales data is also set for release at 8:30 a.m. ET.
At 5:49 a.m. ET, S&P 500 e-minis were up 8 points, or 0.11%. Nasdaq 100 e-minis added 174 points, or 0.58% and Dow e-minis dipped 12 points, or 0.02%.
U.S. stocks have recovered from much of the early June slump, with the blue-chip Dow touching record highs for the past two consecutive sessions, as a resilient U.S. economy, broadening of the rally beyond tech shares and falling oil prices aided sentiment.
Oil prices hovered near a three-month low, fueled by hopes that the interim peace deal between the United States and Iran would allow oil to leave the Gulf through the crucial Strait of Hormuz.
The memorandum of understanding, not yet public, extends by another 60 days a tenuous ceasefire agreed in April, to allow room for talks toward a permanent truce.
Shares of chipmakers including Broadcom, Micron Technology, Advanced Micro Devices, Intel rose between 1.8% and 3.8% in premarket trading.
Shares of Elon Musk's AI and rocket company SpaceX rose 3.2% after surpassing Amazon's market value on Tuesday to become the fifth most valuable company.
La-Z-Boy climbed 17% after the furniture company's fourth-quarter sales and profit beat analysts' estimates. - Reuters
