Source: Sharecast
The FTSE 100 was called to open around five points higher.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The Federal Reserve (Fed) started cutting rates yesterday, delivering a widely expected 25bp reduction. The new dot plot shows a median projection of two more 25bp cuts this year and one additional cut in 2026.
"But the details matter: six members expect no further change, two even pencilled in a rate hike, while nine members see more than just a quarter-point of easing next year, with two of them projecting cuts of up to a full percentage point. In short, the median suggests that Trump won’t get the deep cuts he’s called for - the Fed is not bowing to political pressure."
She said that’s reassuring because the Fed remains independent and data-driven. It’s also reassuring because the Fed doesn’t see a major economic downturn.
"Markets weren’t sure how to take the news," said Ozkardeskaya. "The S&P 500 swung before closing just 0.1% lower. The Russell 2000 surged but erased most of its gains, leaving behind a shooting star candlestick. The US 2-year yield rebounded and the dollar index bounced from a fresh yearly low. Today’s session will be key to gauge whether risk appetite holds.
"Early signs are positive: US and European futures point higher, suggesting that a reasonably dovish Fed, combined with stronger earnings prospects, looser financial conditions and a weaker dollar, keeps risk assets in a sweet spot."
On home shores, the Bank of England is expected to stand pat on rates when it announces it decision at midday.
In corporate news, high street retailer Next posted a surge in sales and earnings, boosted by bumper international sales, sunny weather and disruption at Marks & Spencer.
Total group sales, which include sale items, rose 10.3% in the six months to July 2025 to £3.2bn, while pre-tax profits rallied 13.8% at £515m. Full-price sales were up 10.9%.
However, Next left its full-year outlook unchanged.
Software and security firm Bytes Technology said it had delivered a "resilient" performance in the six months ended 31 August, with trading substantially in line with expectations.
Gross invoiced income was expected to be roughly £1.33bn, while gross profits were seen at no less than £82m, and operating profits were pegged to be at least £33m.
Bytes also cautioned that although it had a strong pipeline going into the second half, it remained mindful that comparatives would be impacted by the particularly strong trading performance it experienced in the last few months of the prior financial year.
C&C Group said chief financial officer Andrew Andrea was leaving to take up the same role at Domino's Pizza.
The Bulmers cider maker added that Andrea would stay in post until the current financial year is completed.
In a separate trading update, C&C held full-year earnings guidance despite a "challenging" macroeconomic environment. Interim underlying operating profit is expected to be in the range of €41.5m to €42.0m, also in line with forecasts.