The FTSE 100 is set to open marginally lower on Wednesday, as global markets adopt a cautious tone ahead of the US Federal Reserve’s highly anticipated interest rate decision. After a record-breaking run that saw the UK’s blue-chip index notch a 16-day winning streak, futures suggest a slight pullback at the open, with the FTSE 100 expected to dip by around 8 points from Tuesday’s close.
This softer start follows a muted session in London, where the FTSE 100 edged up by just 1.07 points to finish at 8,597.42. The mood was similarly subdued across global equities, as investors took profits and positioned portfolios ahead of key central bank updates.
Wall Street closed lower on Tuesday, with the Dow Jones Industrial Average down 1%, the S&P 500 off 0.8%, and the Nasdaq Composite dropping 0.9%. Asian markets, meanwhile, posted modest gains overnight, supported by fresh stimulus measures from Chinese policymakers and optimism over upcoming US-China trade talks.
The spotlight now turns to the Federal Reserve, which concludes its two-day policy meeting later today. While analysts broadly expect the Fed to keep interest rates unchanged, market participants are keenly awaiting Chair Jerome Powell’s comments for any clues on the timing and scale of potential rate cuts later this year.
Persistent global trade tensions, inflationary pressures, and shifting US economic data have all contributed to the current sense of uncertainty.
Currency markets reflected the cautious sentiment, with the pound slightly weaker against the dollar and the euro holding steady. Commodity prices were little changed, with Brent crude oil trading near $62.60 a barrel and gold prices remaining elevated on safe-haven demand.
As the FTSE 100 prepares for a softer open, investors are likely to remain on the sidelines until the Federal Reserve’s decision and press conference provide greater clarity on the outlook for US monetary policy.
The central bank’s guidance will be pivotal in shaping global risk sentiment and determining the next direction for equity markets in the days ahead.