United States stock futures fell on Tuesday night (Wednesday AEST) as market participants turned their focus toward the Federal Reserve’s upcoming policy decision.
By 9:15 am AEST (11:15 pm GMT), Dow Jones Industrial Average futures were down 0.2%, S&P 500 futures slipped 0.3%, and Nasdaq 100 futures lost 0.3%.
During Tuesday's regular trade, the Dow dropped 0.7%, the S&P 500 fell 0.8%, and the Nasdaq Composite slid 0.9%.
Economic releases on Tuesday showed signs of softness in the U.S. economy. Retail sales and industrial production for May both missed expectations, raising fresh concerns about growth momentum.
Analysts at ANZ highlighted the weakening economic backdrop, noting: “U.S. data releases on demand and output for May were soft, with core retail sales falling and industrial production down. The data showed a decelerating economy amid higher tariffs, federal spending cuts and elevated uncertainty.
"Trump has said that pharmaceutical tariffs are coming soon, which is bad news for certain cohorts of the population and a reminder that the tariff issue is not going away soon.”
The ANZ team added: “We forecast that domestic demand will slow this year, growing around 0.2–0.3% q/q over Q2–Q4.”
The deteriorating macro picture comes as geopolitical risks continue to weigh on sentiment. Tensions in the Middle East escalated further on Tuesday after President Donald Trump issued a sharp warning to Iran’s leadership on Truth Social.
“Our patience is wearing thin,” Trump wrote, demanding an “UNCONDITIONAL SURRENDER!”
According to NBC News, current and former administration officials have confirmed Trump is reviewing military options in response to Iranian provocations, including the possibility of launching a strike.
Against this tense backdrop, all eyes now turn to the Federal Reserve, which is due to deliver its latest policy decision early Thursday morning (AEST).
While the Fed is widely expected to keep interest rates on hold, investors are focused on any signals from Chair Jerome Powell regarding future moves., especially amid softening economic indicators and heightened tariff uncertainties.
Beyond the Fed, traders are also watching fresh economic data due Wednesday, including May housing starts and preliminary building permits, as well as weekly jobless claims.
Markets are set to remain closed on Thursday for the Juneteenth holiday.
