The FOMC meeting is very much front of mind for traders ahead of Wednesday’s open, but despite the fact a rate cut is sees as being as good as guaranteed, markets are pointing towards a lower open. News after last night’s close from the shipping and logistics firm FedEx showed that the ongoing trade dispute between the US and China was dragging on the company, with a downgrade of profit guidance for the full year sending its shares sharply lower. Data like this is solid evidence that the trade war is having a meaningful impact on the health of many businesses.

Beyond that expected rate cut later today, it’s going to be the tone of Jerome Powell’s comments which will be most closely followed. Opinions are divided as to how many more rate cuts will be seen by the year end, so anything that puts a more hawkish spin on the outlook could see stocks slide lower. However, with oil prices reverting fairly quickly after the weekend’s attack on Saudi Arabia, concerns over the inflationary pressure this may have brought can arguably be side lined. President Trump is also adamant that rates need to go much lower, too and although the Fed will want to maintain its independence, the lingering threat of recession may prove sufficient to dictate a more dovish narrative.

Ahead of the open, the market is calling the DOW down 22 at 27089 and the S&P down 1 at 3003.

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