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US pre-open: Futures in the red ahead of Fed statement and US quarterly GDP

LONDON (ShareCast) - US stock futures pointed towards a soft open on Wednesday, ahead of key economic data and a statement from the Federal Reserve, which is set to shed light on the interest rates policy. The Dow Jones Industrial Average is expected to open down 45 points, while the S&P 500 and the Nasdaq are expected to begin the session five and 15 points in the red respectively.

The central bank's meeting will conclude late on Wednesday, with its interest-rate statement, which will be closely monitored by investors looking for clues on the timing of a first rates hike, due at 19:00 BST.

"There is a strong determination to raise rates among members of the FOMC but they are equally concerned about derailing the economic recovery at a time when so many headwinds exist," said Oanda's senior market analyst Craig Erlam.

"They'll want to see at least some of these pass before they act, particularly the inflation concerns as this is a core aspect of their mandate." Meanwhile, the preliminary estimate of first quarter US gross domestic product, which is released at 13:30 BST, is expected to show the US economy slowed down from 2.2% in the previous quarter to 1.1%.

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Giving the Fed has been keeping a close eye on economic indicators, the GDP estimate will be closely monitored.

"The weak data could prove to be a positive if the statement of the Federal Reserve leaves investors expecting a delay to the first rate hike," said Jasper Lawler, analyst at CMC Markets.

The economic calendar also sees a report on pending home sales released at 15:00 BST.

In corporate news, Twitter (Xetra: A1W6XZ - news) slid 0.2% in pre-market trading, after the group reported a wider-than-expected loss and sales missed estimates late on Tuesday.

Twitter saw its target price cut from $50 to $40 by analysts at Wedbush, while analyst at JP Morgan slashed the price from $67 and $55.

Time Warner (Xetra: AOL1.DE - news) rose 1.8% ahead of the opening bell after its first quarter profit and sales beat expectations, while wearable video cameras-maker GoPro (Xetra: A1XE7G - news) soared 13% in pre-market trading after it reported late on Tuesday that its first quarter profit had jumped 52%.

Hilton Worldwide Holdings climbed 1.9% after reporting a 25% increase in first quarter earnings, while sector peer Wynn Resorts Holdings plunged 11% ahead of the bell after revealing on Tuesday it had swung to a loss.

The dollar fell 0.17% and 0.30% against the pound and euro respectively and gained 0.35% against the yen, while gold futures slid 0.59% to $1,206.70.

Oil prices fell, with West Texas Intermediate losing 0.6% to $56.72 a barrel, while Brent dropped 0.2% to $64.51 a barrel.