Top 4 things you need to know about the market on Wednesday

1. Fed expected to cut rates

The Federal Reserve is expected to cut rates for the first time in more than a decade when it announces its policy decision at 21:00 (GMT +3).

Although a quarter-point cut is priced in, there is some expectation that the statement will reveal dissenting votes, increasing the focus on Fed Chairman Jerome Powell’s indications for the future path of monetary policy at the follow-up press conference.

Markets will look for hints on how aggressive easing is projected to be for the rest of the year. Fed funds futures put the chance for another 25 basis point cut to arrive in September at just under 70% with the odds for a third in December hovering just above 50%.

The Fed’s message is widely expected to jump start a global easing process by central banks, with the Bank of Brazil forecast to be the first to follow suit.

Ahead of the Fed decision, markets will receive input on the health of the U.S. labor market with the monthly employment report from ADP  at 15:15 (GMT +3). That comes ahead of the official government data set for release on Friday.

2. Apple, AMD provide mixed messages on earnings front

Apple (AAPL.US) shares jumped more than 4% after quarterly earnings beat consensus even as iPhone sales dropped to less than half of its revenue for the first time in seven years. CEO Tim Cook highlighted that non-iPhone revenue growth that extended to all of its other business decisions and provided a sales forecast for its fiscal fourth quarter that topped expectations.

To the contrary, shares in Advanced Micro Devices (AMD.US) sank more than 5% as quarterly profit matched expectations but the chipmaker provided a worse-than-expected revenue guidance for the third quarter.

General Electric (GE.US) will be the major player to release earnings before the open with markets focused on progress in its turn-around plan. Spotify (SPOT.US) will also report ahead of the bell, with Qualcomm (QCOM.US) set to release after the market close.

3. U.S.-China trade talks “constructive”?

With gloom over the slowing global economy being largely blamed on the trade dispute between Washington and Beijing, high levels negotiations in Shanghai ended ahead of schedule.

While no official explanation was given for U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin’s early departure, the news came after U.S. President Donald Trump released a series of tweets Tuesday lashing out at China for what he said is its unwillingness to buy American agricultural products and said it continues to “rip off” the U.S.

Playing down speculation of a complete failure in the talks, China’s Global Times editor-in-chief Hu Xijin - who is often considered a spokesperson for Beijing policy - said that negotiators had an “efficient and constructive deep exchange”.

He tweeted that both sides discussed China increasing purchases of American farm products and the U.S. agreed to facilitate conditions towards that end, while both parties planned to “hold future talks”.

4. U.S. futures rise on earnings ahead of Fed decision

Dow futures gained 72 points, or 0.3%, by 5:42 AM ET (9:42 GMT), S&P 500 futures rose 6 points, or 0.2%, while Nasdaq 100 futures traded up 31 points, or 0.4%.

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