The recent slew of reports, including the consumer price index (CPI) data on Tuesday, have cemented expectations that interest rates have peaked, with traders also estimating potential rate cuts next year.

The upbeat sentiment also led Wall Street's main indexes to close at fresh 2023 highs on Tuesday.

All eyes are now on the producer price index (PPI) data for November, scheduled to be released at 8:30 a.m. ET, before the central bank's interest rate decision at the end of its two-day meeting, due at 2:00 p.m. ET.

Focus will also be on Fed Chair Jerome Powell's comments after the policy announcement and the release of the "dot plot," which could provide a glimpse into monetary policy trajectory.

"We expect Powell to push back on the aggressive rate cuts priced in. While the slowdown in inflation would be a welcome, we think it's too soon for the Fed to declare victory over inflation," said Mohit Kumar, chief economist Europe at Jefferies.

"Powell is likely to keep a balanced tone, stressing the data-dependent nature of Fed's decision-making, and argue that it would be too soon to discuss rate cuts."

Money markets have almost fully priced in the Fed holding rates at the current level of 5.25%-5.50% later in the day. Traders now see possible monetary easing next year, estimating a 76.6% chance of at least a 25-basis-point rate cut in May 2024, according to the CME's FedWatch tool.

The European Central Bank and the Bank of England are also scheduled to deliver their policy decisions later this week.

Meanwhile, nearly $5 trillion in U.S. stock options are due to expire on Friday, set to be the largest on record, which strategists said is likely to keep market volatility in check.

At 7:00 a.m. ET, Dow e-minis were up 51 points, or 0.14%, S&P 500 e-minis were up 6.25 points, or 0.13%, and Nasdaq 100 e-minis were up 39.25 points, or 0.24%.

Among single stocks, Tesla slid 1.1% before the bell as the electric-vehicle maker will lose up to $7,500 federal tax credit for some Model 3 vehicles.

Pfizer dropped 7.0% after the drugmaker forecast 2024 revenue below Wall Street expectations, while Southwest Airlines slipped 1.4% after the carrier raised its forecast for fourth-quarter fuel costs.

Take-Two Interactive Software added 3.1% as the video-game maker is set to be included in the Nasdaq 100 index , effective December 18.

Ford dipped 0.5%, after Exane BNP Paribas downgraded the automaker to "neutral" from "outperform."