Futures on back foot before Fed policy decision

The central bank is expected to lower interest rates by a quarter percentage point—  Reuters pic
The central bank is expected to lower interest rates by a quarter percentage point— Reuters pic

NEW YORK, Sept 18 — US stock index futures dipped today as investors waited for the Federal Reserve’s decision on interest rates in what has been a rocky week for global markets.

The central bank is expected to lower interest rates by a quarter percentage point for the second time in three months, but a deep divide among policymakers has seen traders abandon all bets on a third reduction this year.

The Fed’s policy statement is due at 2:00 p.m. ET (1800 GMT) followed by Chair Jerome Powell’s address a half hour later.

Rate-sensitive banks were little changed in premarket trading after the banking index closed 0.6 per cent lower yesterday following an unexpected squeeze on short-term money market borrowing costs.

Central banks around the world have been taking steps to cushion the impact of a prolonged US-China trade war and other geopolitical risks. Last week, the European Central Bank cut interest rates further and said it would buy back bonds indefinitely.

Expectations of lower rates have spurred a Wall Street rally this year, with the benchmark S&P 500 now less than 1 per cent below its all-time high.

At 7:00 a.m. ET, Dow e-minis were down 18 points, or 0.07 per cent. S&P 500 e-minis were down 3.25 points, or 0.11 per cent and Nasdaq 100 e-minis were down 9.25 points, or 0.12 per cent.

Markets had come under pressure earlier this week after attacks on Saudi Arabia’s oil facilities caused a spike in oil prices and fueled geopolitical tensions.

Package delivery company FedEx Corp warned its full-year earnings would miss analysts’ estimates, sending its shares 11.7 per cent lower premarket.

Adobe Inc fell 2.3 per cent after the Photoshop software maker forecast tepid revenue for the current quarter.

General Mills Inc dropped 4 per cent after missing quarterly sales expectations, hit by weak demand for its yogurt and snacks in the U.S domestic market.

Data expected at 8:30 a.m. ET (1230 GMT) is expected to show US housing starts rising about 5 per cent to 1.25 million in August from a month earlier. — Reuters

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