Investing.com - U.S. stock markets looked set to rebound from the prior session’s three-week lows on Wednesday, as investors regained their appetite for risk ahead of the Federal Reserve’s policy decision later in the day.
Market sentiment was rattled in recent sessions amid mounting concerns the U.K. will vote to leave the European Union in a referendum next week.
The blue-chip Dow futures tacked on 51 points, or 0.29%, by 10:52GMT, or 6:57AM ET, the S&P 500 futures inched up 5 points, or 0.23%, while the tech-heavy Nasdaq 100 futures advanced 11 points, or 0.25%.
While the Fed is widely expected to leave interest rates unchanged at the conclusion of its policy meeting at 18:00GMT, or 2:00PM ET, Wednesday, the U.S. central bank could provide guidance on its pace of tightening over the next several months.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for any change in tone about the economy or future rate hikes. The central bank will also release its latest forecasts for economic growth and interest rates.
Investors all but ruled out a rate hike in June after U.S. employment data earlier this month showed the economy added just 38,000 jobs last month, the smallest increase since September 2010.
Market players are pricing in a 20% chance for a rate hike in July and 35% for September, according to CME Group's (NASDAQ:CME) FedWatch tool. December odds were at about 59%.
Besides the Fed, traders will be watching producer price inflation data and the Empire state survey, both due at 12:30GMT, or 8:30AM ET, while industrial production data is due at 13:15GMT, or 9:15AM ET.
In Europe, stocks were higher for the first time in six sessions as investors shifted focus from ongoing concerns over a potential U.K. exit from the European Union to the Federal Reserve’s policy statement.
Earlier, Asian shares ended mostly higher in volatile trade, as a Federal Reserve policy decision later in the day and Brexit worries kept investors on edge.
Mainland Chinese stock markets rose the most in two weeks on Wednesday, reversing from early losses as investors shrugged off MSCI's decision not to add mainland shares to one of its key benchmark indexes.
In the currency market, the pound bounced off two-month lows against the dollar after data showing that Britain's unemployment rate fell, while pay growth rose in the three months to April. GBP/USD hit highs of 1.4215, pulling further away from the two-month trough of 1.4090 set on Tuesday.
The greenback, meanwhile, slipped against its major rivals as investors awaited the Federal Reserve’s policy statement due later in the day amid ongoing uncertainty over the timing of future rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% to 94.85.
Elsewhere, oil prices dropped to a more than three-week low amid speculation weekly supply data due later in the session will show U.S. crude inventories rose for the first time in four weeks last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, amid expectations for a drop of 2.3 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories rose by 1.518 million barrels in the week ended June 10, disappointing expectations for a decline of 1.4 million barrels.