Oil declines while stocks are muted as 'all eyes are on the Fed' on rate-decision day

The sentiment across the board is that traders are waiting for the Fed's decision on a rate cut most think that one is coming it's just how big a cut.
Oil prices also slipped after falling sharply on Tuesday, but are still well above pre-strike levels.
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Markets on Wednesday look set to open muted with "all eyes are on the Fed," as traders wait to see what the Fed's decision on interest rates will be on Wednesday afternoon.

The consensus among economists and traders alike is that there will be a cut it's just how big a cut is what we're waiting for.

Most are expecting a 25 basis point cut, and then one later in the year, but there is a chance Trump could get his wish of a 50-basis point cut after consistently lashing out at Jerome Powell for not acting swiftly to boost the economy.

Powell is expected to give the Fed's decision about rates at 2 p.m. in Washington.

"The question facing the market is: How many more there are to come?" said Neil Wilson, chief markets analyst at Markets.com.

"Are we at the end of the mid-cycle adjustment, or the early stages of a full-blown easing path? Will we get yet another flip-flop? Traders are increasingly less confident in the number of cuts the FOMC will carry out this year. A hawkish cut is a firm possibility, albeit the median projected fed funds rate from the dot plot should come down a touch," he added.

Oil also has trimmed its gains on Wednesday, after collapsing 13% since the initial spike, after Reuters reported that Saudi Arabia's output is expected to resume at normal levels in the next two to three weeks. The report cited a top Saudi source, who was unnamed.

"More optimism that production output will return to levels before the drone and missile attacks on Saudi Arabia before the end of September should encourage further declines in oil by the end of the week," said Wilson.

He added that it wouldn't be "surprising" if Brent crude edged back to $60 by the end of the week.

Here's how markets look on Wednesday morning at 9 am in London (4 am EST):

US futures are set to open down marginally with the Dow, S&P 500 and Nasdaq all down 0.1%.
Europe also opened muted, with the DAX and Euro Stoxx up 0.1%.
Asian stocks were a bit more mixed, with the Nikkei dropping 0.2%, the Shanghai Composite up 0.3% and the Hang Seng down 0.2%.
In terms of commodities, Brent crude is down 0.3% around $64 a barrel, while WTI is down 0.4% hovering around $58.
Gold prices are also down 0.3%.

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Oil declines while stocks are muted as 'all eyes are on the Fed' on rate-decision day

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