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Wall Street to hinge on Fed policy announcement

U.S. stock-index futures pointed to a flat-to-higher open on Wednesday, as investors awaited a policy decision from the Federal Reserve.

Shares of FedEx climbed in early New York trading after the shipper reported fourth-quarter profit more than doubled from the year-ago period.

The Fed kicked off its two-day policy review late Tuesday and a rate decision is due at 2 p.m. ET on Wednesday. It is expected to announce another $10 billion reduction to its asset purchases, taking them to $35 billion per month. Fed Chair Janet Yellen will hold a news conference half an hour after its decision is published.

The central bank will also be releasing its updated economic growth forecast, which could lead to some market volatility.

"As we get closer to the Federal Open Market Committee meeting, the market is becoming increasingly nervous, and the reactions to economic data correspondingly more severe," Evan Lucas, a market strategist at brokerage IG Markets, said in a note.

He added that the default position for markets at the moment was "prudence and hibernation."

Wall Street rose for a third consecutive session on Tuesday after higher inflation data. The consumer price index for May rose by a larger-than-expected 0.4 percent, marking the biggest uptick in in nearly three years.

"This (inflation data) should come as a relief to the Federal Reserve Committee, as a pick-up in pricing power reflects a stronger economy," said Desmond Chua, market analyst at CMC Markets.

On Wednesday morning, news wires reported that Sunni militants had attacked Iraq's Baiji oil refinery, the largest in the country. This followed reports that Iraqi Prime Minister Nuri al-Maliki had fired four of his top security officials in the wake of the insurgency in the north of the country.

The price of Brent crude oil held above $113 on Wednesday, with the threat of supply disruptions still giving the commodity a premium.

The Commerce Department on Wednesday reported the U.S. current account deficit increased to its widest point in more than a year in the first quarter as exports slid.

Read MoreUS current account deficit widens sharply in first quarter

Other U.S. data Wednesday had the Mortgage Bankers Association reporting a small rise in interest rates had mortgage lending falling last week.

Plus, ex-central bank chief Ben Bernanke will speak at the Federation of European Securities Exchanges in Zurich prior to the Fed announcement.

Google shares will also be in focus after its free YouTube video website announced it would launch a paid-for streaming music service.

—By CNBC's Katy Barnato

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