by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to open little changed on Wednesday and European stock markets are also showing little variation at mid-session, with investors cautious ahead of the announcement of the first rate cut by the U.S. Federal Reserve (Fed) scheduled for later this evening.

New York index futures pointed to a 0.16% opening for Wall Street for the Dow Jones, 0.15% for the Standard & Poor’s 500 and 0.19% for the Nasdaq after a lackluster session. However, the S&P 500 and the Dow Jones set record highs on Tuesday after a series of indicators suggested that the U.S. economy remained robust.

In Paris, the CAC 40 lost 0.47% to 7,481.46 points at around 11:55 GMT. In Frankfurt, the Dax 0.11% and in London, the FTSE 0.64%.

The pan-European FTSEurofirst 300 index fell by 0.39% and the Eurozone’s EuroStoxx 50 by 0.38%. The Stoxx 600 fell by 0.46%, penalized mainly by the new technologies compartment (-0.61%) on profit taking.

After two days of debate by the FOMC, the Fed’s monetary policy committee, the central bank will deliver its rate decision at 1800 GMT, which takes precedence over all other events, including geopolitical risk in the Middle East after the explosion of hundreds of pagers used by Hezbollah in Lebanon, blamed on Israel. Hezbollah leader Hassan Nasrallah is scheduled to speak on Thursday.

Meanwhile, money markets are pricing in a 50 basis point rate cut from the Fed with a 63% probability, according to CME Group’s FedWatch barometer.

“The Fed is highly unlikely to surprise investors by going 25 basis points. We expect the Fed to cut rates by 50 basis points in anticipation of the downtrend in labor market data,” said Sonu Varghese, macro strategist at Carson Group.

Not all observers share this view, however, with the probability of a cut of just 25 basis points by the Fed standing at 37%.

Some analysts also point out that a disproportionate decision by the central bank could scare markets, already worried about the general health of the world’s largest economy.

“(Jerome) Powell will need to provide strong macroeconomic rationales for a half-point move to avoid appearing too sensitive to market expectations for rates,” ING analysts wrote, referring to the Fed chairman, who will speak at 18:30 GMT.

VALUES TO FOLLOW ON WALL STREET

Growth stocks are expected to be mixed ahead of the opening of trading: Apple and Nvidia are down around 0.50, while Microsoft