Wall Street is set to open lower on Tuesday morning, the day after setting new record highs, with investors preferring to steer clear of risky assets ahead of the Fed's announcements.

Half an hour before the opening, futures contracts on the main New York indices were down between 0.3% and 0.4%, heralding a session start in the red.

The S&P 500 and Nasdaq had set new all-time highs yesterday, mainly on the back of the continuation of the "Magnificent Seven" rally.

However, caution is likely to limit risk-taking on the eve of the US Federal Reserve's monetary policy decisions.

The central bank, whose Monetary Policy Committee begins two days of meetings today, is expected to keep its key rates unchanged tomorrow.

But investors are mainly awaiting the institution's new forecasts for future rate movements, and will be watching for comments from its Chairman, Jerome Powell, on the evolution of inflation and the labor market.

According to the professionals, the 'dot plots' should indicate fewer rate cuts this year, with normally two cuts of 25 basis points each, in September and December.

"In short, Jerome Powell will reiterate that the Fed will remain on hold until the inflation outlook returns sustainably to the 2% target, which shouldn't move the markets much," warns François Rimeu, senior strategist at CMAM.

"However, given the release of May CPI data on the same day as the FOMC announcements, this meeting could bring some volatility," he continues.

Consumer prices - which will be released tomorrow before the opening - could indeed show that the pace of inflation leaves the central bank with little room to maneuver to start easing rates.

On the U.S. Treasury bond market, the 10-year yield is down three basis points at less than 4.44% on the eve of the Fed's decisions.

On the energy front, the price of U.S. light crude (West Texas Intermediate, WTI) is stabilizing at around $77.7, after rebounding in recent days.

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