Stock futures flat as earnings pour in; Fed decision looms

U.S. stock index futures were little changed on Wednesday as investors digested a fresh batch of earnings reports ahead of a widely expected interest rate cut by the Federal Reserve later in the day.

The central bank has already lowered borrowing costs twice this year, with a drawn out U.S.-China trade war taking a toll on the domestic economy and raising fears of a slowdown.

Odds of a rate cut have ballooned to over 97% from about 40% a month earlier. Hopes of a rate cut and optimism around trade talks have pushed the benchmark

S&P 500 to record highs in the last two sessions. Nearly half of the S&P 500 companies have posted quarterly results so far, of which 77.1% have beaten profit estimates. Still, analysts are expecting a 1.9% drop in third-quarter earnings, according to Refinitiv data.

General Electric Co (GE.N) gained 5.2% in premarket trading after the industrial conglomerate beat quarterly profit estimates and raised its cash forecast for the year. Advanced Micro Devices Inc (AMD.O) dropped 1.3% after the chipmaker forecast fourth-quarter sales below expectations. Before the Fed's policy decision, a Commerce Department's gross domestic product report is likely to indicate that the U.S. economy is losing speed, but not tipping into recession.

The data, due at 8:30 a.m. ET, is likely to show U.S. economy slowed to 1.6% in the third quarter from 2% in the AprilJune period. At 7:15 a.m. ET, Dow e-minis 1YMcv1 remained unchanged. S&P 500 e-minis EScv1 were up 0.75 points, or 0.02% and Nasdaq 100 e-minis NQcv1 were up 7.75 points, or 0.1%.

Among other stocks, Mattel Inc (MAT.O) surged nearly 20% after the toymaker reported a surprise jump in quarterly revenue on higher demand for newer models of its flagship Barbie brand and dolls based on Korean pop-sensation BTS.

Johnson & Johnson (JNJ.N) rose 2.8% as the company said 15 new tests found no asbestos in a bottle of baby powder that the U.S. Food and Drug Administration says tested positive for trace amounts of asbestos. FDA said it stands by its finding.

The dollar was largely steady against other major currencies on Wednesday as investors braced for a rate cut by the U.S. Federal Reserve and an advance reading of economic growth in the third quarter that could shed light on the rate outlook. Sterling was a tad firmer, with Britain now set to hold its first December election in almost a century after Prime Minister

Boris Johnson finally won parliamentary approval for a snap ballot to break the Brexit deadlock.

For now the spotlight turned to the Fed, which is expected to cut rates for a third time in a row when it concludes its two-day meeting on Wednesday. An advance reading of economic growth data in the third quarter is due out before the Fed concludes its meeting and comes ahead of other major data releases such as Friday's non-farm payrolls report. Economists polled by Reuters expect the U.S. economy grew 1.6% in the third quarter, compared with 2% the previous quarter.

"In the last 4-5 weeks there has been a concern that the consumer part of the market is starting to slow and that could mean more cuts next year," said Derek Halpenny, European head of global markets at MUFG in London.

"So what lies ahead post the Fed meeting, the GDP data, payrolls will shape market expectations in addition to what (Fed chief Jerome) Powell will say today."

The dollar was steady against the euro at $1.1114 EUR=EBS and marginally lower versus a basket of six other major currencies at 97.68 .DXY.

Against the Japanese yen, the greenback was little moved at 108.83 yen JPY=EBS, not far from its three-month high of 109.07 yen touched.