U.S. equity futures moved higher on Wednesday as technology companies staged a rebound and traders awaited the Federal Reserve’s minutes from its January meeting for further direction on interest-rate strategy.
Markets had shown intraday volatility on Tuesday, with the S&P 500 closing 0.1% higher after dropping as much as 0.9% earlier in the session. The Nasdaq and the Dow experienced comparable reversals, underscoring uneven short-term sentiment.
Investors this month have been unsettled by concerns that rapid advances in artificial intelligence could disrupt a range of industries - from software to trucking - and that the benefits of heavy AI investment have not yet translated clearly into revenue and profit gains for many companies. Those anxieties had weighed on broader AI-linked and megacap technology shares.
In premarket action on Wednesday, most large-cap growth names registered gains. Nvidia rose 1.9% after announcing a multi-year agreement to supply Meta Platforms with millions of its current and future AI chips. Other major technology firms also advanced: Amazon.com gained 1.6%, while Meta Platforms and Microsoft each added 0.7%.
Traders were awaiting the Fed’s minutes from the January policy meeting, at which the central bank left its main lending rate unchanged. The minutes are expected to offer clarity on the Federal Reserve’s near-term stance on rates.
"With money markets pricing in another pause at next month’s meeting, investors will be looking to the minutes for clues on how long the central bank may remain on hold," said Aaron Hill, chief market analyst at FP Markets.
Market pricing suggested an increased chance of easing later in the year: traders were assigning roughly a 63% probability to a rate cut of at least 25 basis points at the Fed’s June meeting, according to the CME FedWatch Tool.
Inflation data remained on the docket for later in the week, with the personal consumption expenditures report - the Fed’s preferred inflation gauge - expected to provide further information on price dynamics and the potential implications for borrowing costs.
Corporate earnings added another layer of focus. Chipmaker Analog Devices and contract research organization Charles River Laboratories were among companies scheduled to report results before the opening bell.
At 05:20 a.m. ET, E-mini futures indicated a positive open: Dow E-minis were up 243 points, or 0.49%; S&P 500 E-minis were higher by 39 points, or 0.57%; and Nasdaq 100 E-minis had climbed 161.5 points, or 0.65%.
Among other notable premarket movers, Palo Alto Networks dropped 7.2% after cutting its annual profit forecast, a move the company attributed to rising costs tied to recent acquisitions aimed at bolstering its artificial intelligence capabilities. Cadence Design Systems rose 5.8% after surpassing fourth-quarter revenue expectations.
Separately, Western Digital said it plans to raise $3.17 billion by selling some of its stake in former unit SanDisk through a secondary share sale; SanDisk’s shares fell 2.4% on the news.
Overall, the session reflected a market balancing renewed enthusiasm around headline megacap deals and earnings beats with lingering questions about AI-driven disruption, corporate cost pressures and how long the Fed will maintain its current policy stance.