AM Markets Need to Know: Fed hike, AWS Gulf loss, and more

Stock index futures were mixed on Wednesday as investors focused on the Federal Reserve's interest-rate decision, while Treasury yields edged higher ahead of the policy announcement.

Here are the five news items investors should watch:

Fed expected to raise rates: The Federal Open Market Committee is widely expected to lift its benchmark rate to 3.75%-4.00% from 3.50%-3.75% at its September meeting. A strong August jobs report and hotter-than-expected core CPI have supported expectations for a hike, while Thursday’s PPI showed cooler increases in some service categories.

AWS loses Gulf data access: Amazon Web Services (AMZN) said it cannot restore access to resources and data hosted exclusively in its Bahrain region after Iranian drone strikes damaged infrastructure. AWS said the damage affected multiple Availability Zones and exceeded what its regional and multi-AZ services were designed to withstand. One data-hosting zone in the United Arab Emirates also remains affected.

SoftBank CDS nears three-year high: SoftBank Group (SFTBY, SFTBF) credit default swaps hovered near a three-year high as investors assessed its funding plans for OpenAI (OPENAI). Five-year CDS were indicated around 383.2 basis points, near their highest level since 2023, Bloomberg reported, citing CMA data. SoftBank has committed $64.6B to OpenAI.

OpenAI discusses a $1.2T valuation: OpenAI (OPENAI) has held early discussions with large investors about a new capital raise that could value the company at about $1.2T before an IPO, the Financial Times reported. The talks were initiated by investors and could provide funds for acquisitions while giving the company flexibility to delay its IPO by one or two quarters.

Trump administration appeals EPA ruling: The Trump administration is said to have appealed a federal court ruling blocking the EPA from sending California’s vehicle-emissions rules to Congress for potential repeal. Judge Beryl Howell ruled Sept. 2 that the EPA improperly sent four waivers for congressional review under the Congressional Review Act. The dispute involves stricter emissions standards for cars, trucks, and lawn and garden equipment.