US stock index futures pointed lower Tuesday morning, with the Dow Jones Industrial averaging 0.3% down at 52,277 points and the Nasdaq 100 giving up 0.1%, as investors held back a day before the Federal Reserve's latest policy meeting.
The Wednesday session marks the third rate-setting meeting under new Fed chair Kevin Warsh, and markets are largely pricing in an initial increase of 0.25 percentage points, which would set the federal funds rate at 3.75%–4.00%. Warsh has offered little guidance on the outlook, adding uncertainty to proceedings.
Inflation continues to be pushed higher by rising energy costs, with a turnaround unlikely given worsening tensions in the Middle East. The benchmark 10-year US Treasury yield climbed above 5% for a second consecutive session, echoing Monday's move.
Oil prices did pare some gains, offering modest relief to equity traders. Within individual names, Steel Dynamics rose 4.5% in pre-market trading after Bloomberg reported that leading Chinese steel producers have jointly called for stricter output restrictions and inventory drawdowns. A statement from the China Iron and Steel Association on WeChat described the sector's entry into a phase of "reduction and optimization" following years of growth, an outlook traders said should ease price pressure from Chinese supply globally.
Pharmaceutical shares also found support: Eli Lilly advanced 1.5% after Berenberg analyst Kerry Holford issued a buy rating, writing that investor expectations for the company's leadership in the fast-growing weight-loss drug market remain high and that R&D projects fed by obesity-success data were being undervalued, leaving room to meet 2026 targets.
Crypto-linked equities faced headwinds as prospects dimmed for comprehensive US digital-asset regulation this week. Bitcoin fell 1.7%, while Coinbase shares dropped 4% and Bullish slipped more than 2%.
