US pre-open: Stocks seen flat as investors eye Fed announcement
US futures pointed to a muted open on Wall Street on Wednesday as investors eyed the latest policy announcement and economic projections from the Federal Reserve.
At 1130 GMT, Dow Jones Industrial Average and S&P 500 futures were steady, while Nasdaq futures were 0.1% firmer.
The rate announcement is due at 1900 GMT, with the press conference - Janet Yellen's last as Fed Chair - at 1930 GMT. Market participants are expecting the Fed to hike rates for the third time this year, by 25 basis points.
Konstantinos Anthis at ADS Securities said: "Clearly there is scope for a more cautious tone coming out of the Fed today but the key question is whether this cautiousness finds its way into the forward guidance statement or affects the expectations for the number of rate hikes next year. If Janet Yellen and her colleagues offer a cautious outlook on the economy and acknowledge the challenges the economy is facing, the dollar could sell off today given that the rate hike decision itself is already priced in by market participants. Even if Yellen opts to give as little detail as possible allowing Jerome Powell to start with a clean slate to draw his own path the Dollar could suffer as it may be received as a lack of positive guidance.
"Our view is that Yellen will attempt not to handcuff Jerome Powell in any way and instead offer a conservative yet marginally optimistic outlook for the US economy. She is likely to discuss the improvements in the labour market, suggest that the economy is progressing at a satisfactory pace and maybe make a small reference to the low inflation."
Investors will also be mulling news that Democrat Doug Jones won Alabama's Senate election on Tuesday night, defeating Republican Roy Moore, who was backed by Donald Trump. The victory for Jones will reduce the Republican Senate majority to 51-49 from 52-48, prompting fears that it will be harder for the Republicans to push through major overhauls such as tax reform.
Rabobank said: "The victory of Democrat Doug Jones for a US Senate seat in Alabama is a major setback for President Trump’s legislative agenda beyond the tax bill. Starting in January, the Republican majority in the Senate will be reduced to 51-49. This will increase the pressure on the Republicans to pass a tax bill before the end of the year, with Maine Senator Susan Collins already having some doubts."
In corporate news, biotech group Proteostasis Therapeutics was weaker in pre-market trade after announcing late on Tuesday that it plans to sell 7m shares of its common stocks.
Elsewhere, ship builder Nordic American Tankers tumbled after saying it plans to sell $100m shares through a public offering.
On the data front, the consumer price index for November is at 1330 GMT.