U.S. stock futures traded mostly unchanged Tuesday night as investors awaited the Federal Reserve’s key interest rate decision. The Dow Jones Industrial Average slipped by 33 points, or 0.07%, while S&P 500 futures remained flat and Nasdaq 100 futures edged up 0.02%. The cautious tone follows a record-setting session on Wall Street, with the S&P 500 topping 6,900 for the first time ever, inching closer to the symbolic 7,000 mark.
Market watchers are bracing for a pivotal moment as the Fed concludes its two-day meeting Wednesday. A quarter-point rate cut is widely expected, but attention is turning to whether Chair Jerome Powell will adopt a dovish tone that signals further easing. According to the CME FedWatch Tool, traders are pricing in a 99.5% likelihood of a cut, setting the target rate between 3.75% and 4.00%. Investors are also betting on another reduction in December, which could extend the market’s bullish run through the end of the year.
Earnings season remains another key test for sentiment, with five of the “Magnificent Seven” tech giants reporting this week. Alphabet, Meta Platforms, and Microsoft will release results after Wednesday’s close, followed by Apple and Amazon on Thursday. Any shortfall in performance or guidance could ripple through the broader market, given the outsized influence of these megacap stocks.
Meanwhile, easing trade tensions between the U.S. and China have provided a tailwind for equities. Progress made over the weekend and President Donald Trump’s upcoming meeting with Chinese President Xi Jinping in South Korea have buoyed investor confidence. “The market is seeing President Trump re-engaging with the rest of the world again, and this is a good thing,” said Thierry Wizman, global FX and rates strategist at Macquarie Group, noting that fewer tariff threats could help curb inflation and support a dovish Fed stance.
Still, analysts caution that high valuations and an ongoing government shutdown pose lingering risks for a market already at all-time highs. “I anticipate that we’re going to continue to see enthusiasm as we go through this week,” said Lauren Goodwin, chief market strategist at New York Life Investments. “I think through the end of the year we’re free and clear.” With Wall Street’s optimism riding on the Fed’s next move, traders are watching closely to see if the central bank can balance growth and inflation without shaking market momentum.
source: cnbc