Nasdaq 100 futures rise 0.6% as Fed decision day arrives

Nasdaq 100 futures rose 0.6% on Wednesday, erasing earlier losses as traders positioned for the Federal Reserve's rate decision later in the session.

"The market is pricing in a hold as the base case, but the risk of a hike is real enough that we saw some defensive positioning early in the session," said Chris Beauchamp, chief market analyst at IG. "The reversal in futures suggests dip buyers are stepping in ahead of the 2 p.m. decision."

The reversal came after futures traded lower overnight, tracking weakness in European equities and a continued slide in oil prices that had weighed on energy shares. The Fed's two-day policy meeting under Chairman Kevin Warsh concludes Wednesday at 2 p.m. ET, with CME FedWatch data assigning roughly two-thirds probability to a hold at the current target range of 3.50% to 3.75% and about one-third odds of a 25-basis-point hike. A cooler-than-expected June CPI reading — consumer prices fell 0.4%, pulling annual inflation to 3.5% from 4.2% in May — had hardened the case for a hold, though core inflation remains above the Fed's 2% target.

The outcome carries implications beyond equities. A hold would extend the window of elevated real rates that have weighed on growth stocks, while a hike would raise the opportunity cost of holding non-yielding assets such as Bitcoin and gold. Bitcoin traded near $65,000 and gold near $4,100 an ounce ahead of the decision, both recovering from summer lows triggered by the Fed's hawkish posture. The S&P 500 and Dow Jones Industrial Average futures also turned positive, rising 0.4% and 0.3% respectively, as the broader market joined the tech-heavy index's reversal.

This article is for informational purposes only and does not constitute investment advice.