Stock futures were flat ahead of an expected interest rate hike by the Federal Reserve

Stock futures were muted Wednesday morning as traders awaited the Federal Reserve’s impending interest rate hike announcement.

The Dow Jones Industrial Average and S&P 500 were roughly flat, while Nasdaq 100 futures were 0.04% higher.

Stocks fell on Tuesday On the first day of the Federal Open Market Committee meeting. The Dow Jones industrial average was down 313.45 points, or 1.01%. The S&P 500 and Nasdaq Composite fell 1.13% and 0.95%, respectively.

Yields also jumped on Tuesday. The 2-year US Treasury note yield rose to 3.99%, its highest level since 2007. The yield on the 10-year Treasury briefly touched 3.6%, the highest since 2011.

Investors expect the central bank to deliver on Wednesday A third consecutive 0.75 percentage point rate hike to curb high inflation. A higher-than-expected consumer price index reading in August and hawkish comments from Fed chiefs about rate hikes weighed on stocks, with more pressure likely to come as the central bank continues to fight inflation.

“Without a successful test of June’s lows, we’ll never know if the stock market’s declines are in place for the year,” John Lynch, chief investment officer at Comerica Wealth Management, said in a note Tuesday. “Of course, recent technical weakness in stock prices must now contend with monetary policymakers’ resolve in the fight against inflation.”

If the third-quarter earnings season shows further margin erosion for U.S. companies, that could add headwinds to stock prices, he said.

Investors will look to earnings from Lennar, KB Homes, General Mills and Steelcase on Wednesday. Existing home sales will also be released Wednesday morning.

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