A Commerce Department report that orders for big-ticket manufactured items were essentially flat in May had little effect on stock futures. The innocuous reading left Wall Street able to keep its attention on the central bank's next move.
Wall Street expects the Fed will stand pat on rates after cutting them quickly earlier this year, and to signal it could start raising rates again. But most market watchers contend the central bank is hesitant to begin hiking rates now, even with rising prices, because an increase could hobble the economy.
At its last meeting, in April, the Fed lowered rates by a quarter point, leaving the federal funds rate at 2 percent. When the central bank began its campaign to inject the economy with cheaper money in September the funds rate, which banks charge each other for overnight loans, stood at 5.25 percent. Policymakers were worried that tightening credit over fears souring mortgage debt would destabilize the economy.
The Fed's decision is due at 2:15 p.m. EDT. Before then, investors expect to receive figures on May orders for durable goods and sales of new homes for May. The government is also expected to report weekly oil inventory figures, which could affect oil prices.
Dow Jones industrial average futures rose 34, or 0.29 percent, to 11,847. Standard & Poor's 500 index futures rose 7.30, or 0.55 percent, to 1,322.80, and Nasdaq 100 index futures advanced 15.25, or 0.80 percent, to 1,926.75.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.13 percent from 4.10 percent late Tuesday. The dollar was higher against other major currencies, while gold prices fell.
Light, sweet crude slipped 12 cents to $136.88 in premarket electronic trading on the New York Mercantile Exchange.
The run-up in oil has weighed on the stock market. The Fed's loosening of interest rates to help the economy has also weakened the dollar and helped push prices for oil and other commodities higher. Wall Street's pullback amid concerns about inflation and its effect on the economy has left stocks down 10 percent for the year and at their lowest levels since mid-March.
The rate hikes have also left other markets more attractive to currency investors than the U.S. In Europe, where higher interest rates offer better returns, European Central Bank President Jean-Claude Trichet said Wednesday he hasn't indicated that investors should expect a series of interest rate hikes in the coming months. While the ECB is expected to raise rates at its July 3 meeting, he said he wouldn't "precommit" to rate hikes beyond that.
The Commerce Department said orders for durable goods - which include aircraft and machinery but also consumer items like cars, refrigerators and computers - were essentially unchanged in May, as economists had expected. The report indicates that orders for aircraft and computers offset weakness elsewhere.
In corporate news, Barclays PLC cheered investors by announcing plans to raise $8.85 billion by issuing shares. The investments will come from the Middle East and Asia and will help the bank improve its financial position following losses in the U.S. mortgage market.
Darden Restaurants, the operator of the Olive Garden and Red Lobster chains, said it expects earnings to grow by 14 to 15 percent in 2009. The company said it swung to a profit from a loss in its fiscal fourth quarter following strong sales at the Olive Garden.
General Mills Inc. said costs related to hedging commodities lowered its fiscal fourth-quarter profit by 17 percent. But the company cited strong sales of yogurt, cookie mixes and Cheerios for pushing revenue above Wall Street's expectations.
Rockwell Automation Inc., which makes industrial parts, warned that it expects to fall short of its full-year earnings forecast because of slower-than-expected growth in the U.S. and Europe.
Ford Motor Co.'s Volvo division said it handed layoff notices to 1,200 workers in Sweden following a $151 million loss in the first quarter amid slumping U.S. sales.
Overseas, Japan's Nikkei stock average slipped 0.14 percent. In afternoon trading, Britain's FTSE 100 rose 0.36 percent, Germany's DAX index added 0.42 percent, and France's CAC-40 was rose 0.93 percent.
