U.S. Stock Index Futures Update

(Reuters) – U.S. stock index futures were higher on Wednesday as traders awaited the Federal Reserve's final rate decision of the year and guidance on its approach for 2025.

The Fed is widely expected to reduce interest rates by 25 basis points at its meeting, with the announcement anticipated at 2 p.m. ET on Wednesday.

With a rate cut broadly priced in, the Fed's summary of economic projections (SEP), showcasing the "dot plot" of rate projections, and comments from Chair Jerome Powell will be crucial 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," said ING analysts, who still expect a 25 basis point cut at the meeting.
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> "We doubt the Fed will derail from a generally cautious stance on guidance."

Wall Street's main indexes dipped in Tuesday's session, with the Dow logging its ninth straight daily decline, marking its longest losing streak since February 1978. Markets are increasingly bracing for a more hawkish Fed next year, as strong growth and persistent inflation may limit the case for continued rate cuts.

U.S. Treasury yields have ticked higher with changing Fed expectations, particularly the 10-year yield, which rose past 4.4%.

Most rate-sensitive megacap stocks ticked higher in premarket trading. Nvidia (NASDAQ: NVDA) surged over 3% after hitting a two-month low on Tuesday. In contrast, Tesla (NASDAQ: TSLA) dropped 2.8% following a 14% rise over the last three sessions.

Dow E-minis were up 89 points (0.2%), S&P 500 E-minis were up 14.25 points (0.24%), and Nasdaq 100 E-minis rose 39.25 points (0.18%).

Despite some jitters regarding future Fed policy, stocks remain on track for a strong year-end, with the S&P 500 up nearly 27%, the Nasdaq up nearly 34%, and the Dow up over 15%.

Crypto-focused stocks experienced a dip as Bitcoin fell 2%. MARA Holdings was down 1.8% while Riot Platforms (NASDAQ: RIOT) dropped 2.4%.

Finally, Birkenstock (NYSE: BIRK) edged lower after forecasting fiscal 2025 revenue growth below market expectations.