A Fed monetary policy decision is due at 2pm where policymakers are widely expected to leave interest rates unchanged at the 4.25%-4.5% range.

Investors will focus on Fed chair Jerome Powell’s comments to gauge how he plans to combat the risk of rising prices, which remain a dominant concern for the central bank. The central bank is expected to balance the risk of slowing growth and higher inflation.

“A lot has happened since their last meeting in early May … given that uncertainty and the potential for fresh inflationary spikes, they’re widely expected to keep rates on hold again,” Jim Reid, global head of macro and thematic research at Deutsche Bank, said in a note.

Money market moves show traders are pricing in about 46 basis points of rate cuts by the end of 2025, with a 56% chance of a 25-bps rate cut in September, according to CME Group’s FedWatch tool.

With conflict escalating in the oil-rich Middle East, markets have been on edge over the possibility of a more direct US military involvement in the Israel-Iran aerial war.

A source familiar with internal discussions said US President Donald Trump and his team were considering a number of options, which included joining Israel in strikes against Iranian nuclear sites.

At 5.37am, Dow E-minis were up 89 points, or 0.21%, S&P 500 E-minis were up 16.5 points, or 0.28%. Nasdaq 100 E-minis were up 75.5 points, or 0.35%.

Initial jobless claims data is scheduled at 8.30am.

Among premarket movers, shares of Tesla rose nearly 1%.

Shares of stablecoin issuer Circle Internet rose 3.1% after the US Senate passed a bill to create a regulatory framework for dollar-pegged cryptocurrency tokens known as stablecoins.