Investing.com - The U.S. Federal Reserve concludes its latest policy meeting later in the session, and U.S. stock futures have edged higher in cautious trading ahead of the pronouncement. Turkish markets are in turmoil after the arrest of President Tayyip Erdogan’s main political rival, while crude has retreated after Russia agreed to not target Ukraine’s energy facilities for a month.
1. Fed concludes latest meeting
The Federal Reserve concludes its latest policy-setting meeting later in the session, drawing the attention of most investors as they attempt to gauge the potential impact of President Donald Trump’s tariff policies on the world’s largest economy.
The U.S. central bank is widely expected to hold interest rates unchanged in the 4.25%-4.50% range at the conclusion of the two-day gathering, which will likely mean that investors will be paying more attention to comments from Fed Chair Jerome Powell as well as its updated summary of economic projections.
A slowdown in consumer spending might raise the Fed’s concerns about growth and make it more inclined to cut rates. But the volatility around Trump’s trade policies, which risk raising prices, has left Fed officials facing the potential quandary of a weaker economy and an acceleration in inflation.
Markets are currently pricing in about 60 basis points of cuts from the Fed this year, although several U.S. central bank officials have cautioned against the Fed moving too quickly on rates and said they would wait to see the impact of tariffs in economic data before making any policy shifts.
2. U.S. futures gain ahead of rate call
U.S. stock futures edged higher Wednesday, amid cautious trading ahead of the conclusion of the latest Federal Reserve policy meeting.
At 04:35 ET (08:35 GMT), the S&P 500 futures had edged up by 10 points, or 0.2%, Nasdaq 100 futures had risen by 45 points, or 0.2%, and Dow futures had climbed by 55 points, or 0.1%.
The main Wall Street indices struggled on Tuesday, ending two winning sessions, with the Dow Jones Industrial Average dropping 0.6%, the S&P 500 shedding over 1% and the Nasdaq Composite declining 1.7%.
U.S. equities have struggled of late amid concerns that President Donald Trump’s tariff policies will hit economic activity - a view given substance by recent soft economic data.
Additionally, U.S. Treasury Secretary Scott Bessent said over the weekend that there were "no guarantees" that the U.S. economy will avoid recession this year.
3. Turkish market volatility
Ekrem Imamoglu, the mayor of Istanbul and Turkish President Tayyip Erdogan’s main political rival, has been detained Wednesday on charges including corruption and aiding a terrorist group.
The move has drawn criticism from the main opposition party, which has labeled it a "coup attempt against the next president."
It has also resulted in volatility in the Turkish markets, with the country’s benchmark stock index, BIST 100, slumping by 7%, while the Turkish lira was down more than 10% against the U.S. dollar.
Imamoglu had been on the verge of being named the main opposition Republican People’s Party official presidential challenger to Erdogan, who has run Turkey for more than two decades.
The next election is set for 2028, but Erdogan has reached his two-term limit as president. If he wishes to run for the presidency again he must call an early election and claim he had not finished his second term or change the constitution.
4. Bank of Japan starts central bank parade
The Bank of Japan earlier Wednesday started the ball rolling during this busy week for central banks, and as widely expected, the Japanese central bank decided to keep its short-term policy rate unchanged at 0.5% by a unanimous vote.
The policymakers decided to spend more time gauging the impact of potential higher U.S. tariffs on Japan’s fragile economy, which is very export dependent.
Apart from the Bank of Japan, and the U.S. Federal Reserve, there are a number of other major central banks due to hold policy-setting meetings this week - including the Bank of England, the Swiss National Bank, the People’s Bank of China and Sweden’s Riksbank.
5. Oil falls after Ukraine energy ceasefire agreement
Oil prices fell Wednesday, extending the previous session’s losses, after Russia agreed to stop attacking Ukrainian energy facilities for 30 days, after a phone call between U.S. President Donald Trump and Russian President Vladimir Putin, which could eventually lead to more Russian oil entering global markets.
At 04:35 ET, Brent crude futures fell 0.8%, to $70.03 a barrel, and U.S. West Texas Intermediate crude was down 0.8%, at $66.22 a barrel.
Both contracts dropped around 1% on Tuesday.
This agreement, which stopped short of endorsing a full 30-day ceasefire that Trump hoped for, aims to de-escalate tensions and protect critical energy assets in Ukraine, marking a potential step toward broader peace negotiations.
If U.S.-Russia peace talks on Ukraine succeed, Washington could ease certain sanctions on Russian energy exports, either by relaxing restrictions on oil trade or allowing more exemptions for buyers. This would enable Russia to increase crude and refined product shipments.