S&P, Nasdaq Futures Steady Ahead of Fed Decision, Microsoft and Meta Earnings; Chip Rout Deepens in Asia

U.S. stock futures steadied in Wednesday's premarket session as investors positioned for the Federal Reserve's policy decision and after-the-bell earnings from Microsoft and Meta Platforms, while a renewed selloff in Asian chipmakers and a surprise Iranian attack on U.S. forces in the Middle East kept risk appetite in check.

S&P 500 futures edged up 0.24% and Nasdaq-100 futures rose about 0.3%, while contracts on the Dow Jones Industrial Average slipped 0.2% as oil prices rose amid renewed Middle East tensions. Futures fluctuated after U.S. forces intercepted a surprise Iranian attack targeting American troops in the region, driving oil prices higher and renewing concerns over inflation and the outlook for interest rates. The Federal Open Market Committee (FOMC) is widely expected to keep the Fed funds target rate unchanged, although some traders continue to price in the possibility of a rate hike.

The tone in Treasuries was cautious. Treasury yields rose, with traders assigning about a 38% chance of a Federal Reserve rate increase. The dollar was little changed and gold pulled back from recent highs, while Brent and West Texas Intermediate crude bounced on the geopolitical headlines.

MarketFramework's Positioning Egde tool reveals a slight bias toward long positions. However, trade outcomes reveal a sharp divergence: only 27.3% of profitable trades were long bets, while long positions accounted for 80% of losing trades.

This suggests that although traders were modestly bullish on the ES contract, long positions have largely been poorly timed or entered at unfavourable levels. The fact that most losing trades were longs, while the majority of profitable trades came from shorts, indicates that downside or mean-reversion strategies have recently outperformed bullish bets. From a contrarian perspective, heavy losses among long traders may also point to weakening sentiment or persistent selling pressure in the index.

Ford Motor surged nearly 5% in premarket trading after the automaker topped earnings expectations and raised its 2026 outlook. Ford reported second-quarter revenue of $44.89 billion, missing the consensus estimate of $45.81 billion, while adjusted earnings came in at 42 cents per share, beating estimates of 35 cents per share.

Visa fell more than 1% after the payments company announced elimination of 7% of its workforce following a second-quarter beat. SK Hynix's U.S.-listed shares dropped more than 2% despite reporting another record quarterly profit, as results came in below analyst estimates.

Microsoft and Meta will report earnings after the bell; for Q4, Wall Street expects Microsoft to report adjusted earnings per share of $4.24, up 16.2% from $3.65 in the year-ago quarter, on sales forecast to rise 14.6% year-over-year to $87.62 billion. Meta's Q2 revenue is widely estimated to rise about 27% to $60.29 billion, with earnings per share forecast to rise to $7.4 from $7.14.

Procter & Gamble, expected to post quarterly earnings of $1.41 per share on revenue of $21.38 billion before the opening bell, rose about 0.75% to $148.88 in premarket. Chip names are in focus after another leg lower in Asian semiconductor peers, with attention on Lam Research, Arm Holdings and Qualcomm ahead of their after-hours releases.

The chip rout that has dogged global tech for a week deepened again in Asia on Wednesday. In Seoul, the Kospi ended down about 6% at 5,663.24 — its lowest level since early April after only recently topping 9,000 — with SK Hynix sinking 9.61% and Samsung Electronics dropping 5.23%.

In Tokyo, the Nikkei 225 lost 1.5% to 61,434.19, giving up early gains, as chipmaking equipment maker Tokyo Electron sank 10.6% and chip measuring and inspection systems maker Lasertec Corp. fell 8.3%. Taiwan's Taiex shed 3.8%, the Shanghai Composite index reversed early losses to pick up 0.4% and close at 3,830.02, and Hong Kong's Hang Seng gained 1.96% to 25,807.92. Australia's S&P/ASX 200 added 1% to 9,038.60.

European stock markets traded in negative territory in the mid-session, with Stoxx 50 down about 0.40%. The U.K.'s FTSE 100 firmed up by 0.25%, and the German DAX traded marginally higher, while the French CAC 40 fell 0.56%

The main event is the FOMC decision at 2 p.m. ET, followed by Chair Kevin Warsh's press conference. The Fed is widely expected to keep the federal funds rate unchanged, with markets assigning roughly a 38% probability of a rate cut. Traders will also closely scrutinise the voting split for clues on the likelihood of a September cut, which is currently priced at around 80%. Citadel Securities said it expects the Fed to raise interest rates this week to reinforce Warsh's credibility in fighting inflation after the central bank chief repeatedly pledged to restore price stability.

Thursday brings the first estimate of Q2 GDP, June PCE and core PCE prices — data that could reset rate expectations if inflation surprises in either direction, alongside earnings from Mastercard, Apple and Amazon.

With momentum pointing decidedly down, the PHLX Semiconductor Index on Monday flirted with its lowest level since mid-May, breaking a trendline and falling below its 50-day moving average, yet it has plenty of room to fall to reach the 200-day moving average and is not yet near oversold on the Relative Strength Index. For the S&P 500, traders are eyeing the 7,395–7,428 zone that framed Tuesday's session as the immediate reference band into the Fed.

During Tuesday's regular session, the Dow and S&P 500 gained 1.03% and 0.21%, respectively, while the tech-heavy Nasdaq Composite slipped 0.22%. The Nasdaq Composite ended in the red for the fifth consecutive session, dragged down by struggling chip stocks, with the VanEck Semiconductor ETF (SMH) dropping 3.5% in its fourth straight negative session. Micron slumped 8.8%, AMD lost 8.1%, Intel fell 5.9%, and Sandisk tumbled 14.2%.