Key facts
- Wall Street indexes opened lower as investors awaited the Federal Reserve's monetary policy decision.
- Oil prices jumped over 4% due to renewed Middle East violence and missile interceptions.
- Chip stocks, including SK Hynix and Samsung Electronics, experienced significant declines.
- Generac shares rose premarket after exceeding profit expectations.
- Procter & Gamble shares fell following weak sales figures.
Wall Street futures indicated a mixed opening on Wednesday as investors awaited the Federal Reserve's interest rate decision, with Middle East tensions and Big Tech earnings also influencing sentiment. Oil prices surged over 4% after Jordan and the U.S. intercepted Iranian missiles launched against American forces in the region. Global markets were mixed, with South Korea's Kospi index falling significantly due to doubts over AI investment sustainability and increased competition from China.
The Federal Reserve is not expected to alter interest rates at this meeting, given inflation remains above target and unemployment is low. However, a significant majority of traders anticipate a rate hike in September. In equities, Generac shares rose premarket after surpassing profit expectations, while Procter & Gamble saw a decline following flat organic sales. Major tech companies Meta, Microsoft, and Starbucks are scheduled to release their latest earnings after the market close.
European markets showed mixed performance, with Germany's DAX unchanged, France's CAC 40 down 0.6%, and Britain's FTSE 100 up 0.3%. Asian markets experienced notable declines, particularly in the semiconductor sector. South Korea's Kospi index closed 6% lower, heavily impacted by a sharp drop in SK Hynix shares, which fell 9.4% after its quarterly profit missed forecasts. Samsung Electronics also declined. Tokyo's Nikkei 225 lost 1.5%, with chip-related stocks like Tokyo Electron experiencing significant drops. Taiwan's Taiex shed 3.8%, while China's Shanghai Composite edged up 0.4% and Hong Kong's Hang Seng gained 2%. Australia's S&P/ASX 200 rose 1% on moderate inflation data, and India's Sensex added 1.1%.