On Wednesday, investor attention was focused on the U.S. Federal Reserve meeting amid heightened geopolitical tensions in the Middle East. Following the interest rate hike by the Reserve Bank of Australia, all eyes were on the Fed's decision. Markets expected the Federal Open Market Committee to keep policy unchanged, but the main focus was on updated economic forecasts, particularly the 'dot plot'. Analysts suggest the dot plot may no longer project any rate cuts for this year. Fed Chair Jerome Powell also held a press conference, where markets watched for comments on his potential to remain on the Board after his term as chair ends. Meanwhile, oil prices paused their gains after the Iraqi government and Kurdish authorities agreed to resume oil exports via Turkey's Ceyhan port, though the Strait of Hormuz remained mostly closed. Natasha Kaneva, head of global commodities research at JPMorgan, stated that the apparent stability in Brent and WTI prices reflects a temporary buffer from regional inventory overhang, benchmark composition, and policy intervention. She added that if the committee views the oil shock as leading to stickier inflation, the dots could shift more hawkishly, potentially to zero cuts this year. Meanwhile, S&P 500 futures rose 0.4%, and Nasdaq futures gained 0.5%, supported by strong earnings expectations from chipmaker Micron Technology due later Wednesday. Investors also monitored commentary on chip shortages and pricing. Reports that Nvidia had received Chinese approval to sell its second-most powerful AI chips also boosted sentiment. In Europe, EUROSTOXX 50 futures were up 0.6%. Japan's Nikkei also rallied 2.6%, while Chinese blue chips fell 0.5%.
