Market Analysis

US equity futures are stable with the Fed and inflation in mind

Amos Simanungkalit · 09 Oct9.9K Views

U.S. stock index futures saw little movement in evening trading on Tuesday, as investors refrained from making significant trades ahead of key signals on interest rates from the Federal Reserve and crucial inflation data.

Futures remained steady following a positive, tech-driven session on Wall Street, although most sectors underperformed. Investors continued to be cautious due to ongoing tensions in the Middle East, while optimism around China's stimulus measures faded.

S&P 500 Futures edged down slightly to 5,798.25 points, while Nasdaq 100 Futures dropped 0.1% to 20,286.50 points as of 19:11 ET (23:11 GMT). Dow Jones Futures held steady at 42,378.0 points.

Fed Minutes and CPI Data in Focus
Markets are now awaiting further signals on U.S. interest rates, with increasing uncertainty surrounding the Federal Reserve's plans to cut rates in the coming months. The minutes from the Fed’s September meeting are set to be released on Wednesday, and several Fed officials are scheduled to speak.

Last week's strong payroll data raised doubts about the Fed's need to continue cutting rates aggressively. According to CME FedWatch, traders are pricing in an 81.1% probability of a 25 basis point rate cut in November, while there's an 18.9% chance that rates will remain unchanged.

The Fed had cut rates by 50 basis points in September, indicating that further cuts would depend on inflation and labor market conditions. Consumer price index (CPI) inflation data, due on Thursday, will likely play a significant role in shaping the Fed’s future policy decisions.

Tech Stocks Lift Wall Street, Nvidia Leads the Way
On Tuesday, Wall Street indexes advanced, largely driven by gains in the technology sector. NVIDIA Corporation (NASDAQ: NVDA) surged 4%, helping to lift the broader market, though the stock dipped in after-hours trading.

The S&P 500 climbed 1% to 5,751.13 points, while the NASDAQ Composite jumped 1.4% to 18,182.34 points, recovering most of Monday’s losses. The Dow Jones Industrial Average gained 0.3%, closing at 42,080.37 points.

This week, attention is also turning to the start of the third-quarter earnings season, with major banks set to report on Friday. Investors will be watching closely to see how corporate profits have held up against the backdrop of high interest rates and persistent inflation.