U.S. equity futures were hovering just above unchanged early Wednesday, as traders braced for a pivotal Federal Reserve interest rate announcement later in the day. Many economists expect the central bank to deliver what has been described as a “hawkish cut,” lowering rates now while signaling limited room for additional reductions going forward. Yet markets continue to price in more policy easing in 2026, particularly as President Donald Trump — a vocal advocate for rapid rate cuts — is reportedly preparing to conduct a final round of interviews with candidates to succeed Jerome Powell as Fed Chair.

On the earnings front, investor attention is centered on Oracle (NYSE: ORCL), whose artificial intelligence roadmap will be a major focus when it reports after the closing bell.

Futures drift ahead of Fed outcome

U.S. futures showed little movement early Wednesday as investors prepared for what could be a hotly debated rate decision from the Fed.

By 02:52 ET, Dow futures were flat, while S&P 500 and Nasdaq 100 futures each inched up 0.1%.

Tuesday’s session on Wall Street ended mixed. The Dow and S&P 500 slipped, while the Nasdaq Composite added 0.1%, as markets digested the start of the Fed’s two-day meeting.

Sentiment was dampened slightly by a minor uptick in October job openings even as hiring remained sluggish and resignations hovered near a five-year low — dynamics some economists attribute to uncertainty introduced by sweeping U.S. tariffs.

Market expects a “hawkish cut”

The latest Labor Department figures reinforced expectations that the Fed will reduce rates on Wednesday, but with a more restrictive tone regarding future moves.

According to CME FedWatch, traders assign roughly an 88% probability to a quarter-point cut. Such easing — following reductions in September and October that brought the target range down to 3.75%–4% — is generally seen as supportive of investment and job creation, though it risks fueling inflation.

Reports suggest policymakers may be sharply divided this time around, given persistent inflation concerns and the lack of fresh data due to the record-long U.S. government shutdown. A new Summary of Economic Projections is also due for release.

Fed Chair Jerome Powell is expected to push for a cut but then use the press conference to emphasize that additional easing will require strong justification.

Still, maintaining a high bar may prove difficult once policymakers see updated inflation and labor data in January.

Trump to begin final round of Fed Chair interviews — report

The Wall Street Journal reported that President Trump is preparing to begin the final phase of interviews for the next Fed Chair.

Citing senior officials, the WSJ said former Fed Governor Kevin Warsh will meet with Trump on Wednesday, with additional candidates to follow.

Among them is Kevin Hassett, widely viewed as the frontrunner to succeed Powell next year. Hassett is a close Trump ally and has consistently pushed for aggressive rate cuts, though as one vote on the 12-member FOMC, his ability to shape decisions may be limited.

Still, ING analysts note that traders have already priced in “so much easing” despite projections for a “hawkish cut” today, adding:

“Presumably, this is the Kevin Hassett effect, where his arrival at the Fed in February can throw a dovish cloak over the FOMC outlook,” wrote ING’s Chris Turner and Frantisek Taborsky.

Oracle earnings in focus

Oracle will headline Wednesday’s corporate reports. Analysts are eager to hear how the company plans to advance its AI strategy.

After partnering with OpenAI, Oracle has reshaped its reputation from a secondary cloud provider into a key supplier of the computing power needed for AI model development.

A contract backlog exceeding $400 billion sent its shares soaring earlier this year and briefly pushed its market value near $1 trillion, temporarily elevating co-founder Larry Ellison to one of the world’s richest individuals.

But momentum has cooled recently amid concerns that Oracle may be overly dependent on OpenAI and has taken on too much debt to expand its data-center footprint.

Adobe results also on tap

Adobe (NASDAQ: ADBE) will report earnings after the market close. Despite its portfolio of creative tools like Photoshop and Acrobat, the stock has fallen more than 21% this year, heavily lagging the Nasdaq Composite.

In a note, Stifel analysts said it is “no secret” that a major “overhang” on Adobe’s valuation is the belief that AI could disrupt creative departments by “making creators more efficient by orders of magnitude and shrinking the number of addressable seats over time.” A seat refers to an individual license for Adobe’s software.

They added that triggers to “quickly turn sentiment around” remain “foggy,” though a “critical and successful AI-induced strategy pivot” is in its “early days.”

The analysts said Adobe could benefit from positioning itself as a kind of “Switzerland” within the AI ecosystem, a neutral platform where users can “test, leverage, and pay for third-party model usage.”

Adobe stock price

Oracle stock price

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