U.S. equities are attempting a modest rebound Wednesday ahead of the Federal Reserve’s 2:00 p.m. ET policy decision, with lower oil prices providing some relief after two consecutive down sessions. At 4:41 a.m. ET, Dow futures were up 0.05%, S&P 500 futures were up 0.15% and Nasdaq 100 futures were up 0.30%. Tuesday, the Dow fell 0.63%, the S&P 500 declined 0.45%, the Nasdaq lost 0.78% and the Russell 2000 fell roughly 0.8% as oil and Treasury yields moved higher.
Treasury yields remain near cycle highs. Tuesday’s 2-year yield rose 2 basis points to 4.67%, the 10-year gained 2 basis points to 5.00% and the 30-year rose 2 basis points to 5.37%. The 10-year is holding near 5.00% this morning. The DXY is near 99.6, with the euro around $1.155, sterling near $1.348 and the dollar around ¥155. Markets price roughly a 93% probability of a 25-basis-point Fed hike today.
October WTI surged 4.56% Tuesday to $106.01, but crude is easing this morning after Saudi Arabia began offering additional cargoes through Oman and U.S. inventory data showed a larger-than-expected crude build. WTI is near $104-$105 and Brent around $108. December gold, which closed Tuesday at $4,336.60, is rebounding toward $4,365 as the dollar and oil soften ahead of the Fed decision.
The Fed policy statement and updated quarterly economic projections are due at 2:00 p.m. ET, followed by Chair Kevin Warsh’s press conference at 2:30 p.m. Markets expect a quarter-point increase to 3.75%-4.00%, with the focus shifting immediately to the new rate projections and Warsh’s description of the path beyond today. Before the Fed, August retail sales and import/export prices are due at 8:30 a.m., followed by July business inventories and the September NAHB Housing Market Index at 10:00 a.m.
Sector Highlights
Sector performance was broadly negative Tuesday, with Energy the clear exception. Energy gained 2.26% and Materials rose 0.37%. Health Care slipped 0.08%, Real Estate fell 0.23%, and Technology and Financials each declined 0.34%. Consumer Discretionary was the weakest sector at -1.76%, followed by Utilities -1.20%, Consumer Staples -0.85%, Communication Services -0.84% and Industrials -0.64%. Breadth was weak, with decliners leading 2.05:1 on the NYSE and 2.37:1 on the Nasdaq.
Information Technology
- Intel (INTC +5% premarket) is rallying after reports that SK Hynix is in talks with Intel about producing memory chips in the U.S., potentially through a lease or joint venture involving Intel’s planned Ohio facility. Discussions remain preliminary.
- Nvidia (NVDA) is up less than 1% and Marvell Technology (MRVL +~2%) is also higher as semiconductor shares recover modestly from this week’s AI-related selloff.
- Microsoft (MSFT) and Apple (AAPL) are modestly lower premarket as higher Treasury yields continue to constrain mega-cap growth valuations.
Communication Services
- Meta Platforms (META) is roughly flat after CEO Mark Zuckerberg pushed back against calls for a coordinated slowdown in AI development, arguing that competition, liability and internal safety controls provide sufficient incentives for responsible development.
Consumer Discretionary
- Starbucks (SBUX) is considering selling a majority stake in its Japan business, which sources estimate could be valued around $3 billion. Starbucks Japan operates 1,883 stores, nearly 9% of the company’s global store base, and a formal sale process could begin in the fourth quarter.
- Dave & Buster’s (PLAY) remains under pressure after falling 19% Tuesday following a second-quarter revenue miss, extending concerns around discretionary spending at restaurants and entertainment venues.
Financials
- Coinbase (COIN) and Strategy (MSTR) remain weaker after the U.S. Senate failed to advance the Clarity Act. Coinbase dropped roughly 10% Tuesday, while bitcoin fell about 4% to around $76,000 and remains under pressure this morning.
- Circle Internet Group (CRCL) also fell roughly 9%-11% Tuesday as the stalled legislation delayed prospects for a comprehensive U.S. digital-asset regulatory framework.
Health Care
- Waystar (WAY) remains in focus after gaining 7.1% Tuesday on reports that the healthcare-payments software company is exploring strategic alternatives, including a potential sale. Waystar has reportedly hired Evercore to advise on the early-stage process.
Energy
- Chevron (CVX) and ConocoPhillips (COP) are down roughly 0.3% premarket as crude retreats from Tuesday’s highs. Oil remains above $100, but the addition of Saudi shipments through Oman and the surprise U.S. inventory build are easing immediate supply fears.
