Dow Jones Today: Stock Futures Mixed as Investors Prepare For This Week's Fed Rate Decision
Stock futures were mixed Monday at the start of a week that will be a hugely consequential for financial markets as the Federal Reserve appears poised to cut its benchmark interest rate for the first time in four years.
Futures tied to the Dow Jones Industrial Average were up 0.3%, while those linked to the S&P 500 were fractionally lower and Nasdaq 100 futures were off 0.4%. The major indexes rallied last week amid optimism about the expected rate cut and as technology stocks gained, with the S&P 500 and Nasdaq posting their biggest weekly gains of the year after closing higher on five straight days.
Large-cap tech stocks were under pressure in premarket trading Monday. AI chipmaker Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL) and Broadcom (AVGO) were lower, while Alphabet (GOOGL), Amazon (AMZN) and Meta Platforms (META) were little changed.
The big question for market participants this week isn’t whether the Fed will ease policy at its meeting Wednesday but how aggressive the central bank will be with its rate cuts. Fed officials have indicated that rate cuts are coming as inflation has eased and the labor market has weakened, but haven’t commented on the pace or depth of the easing.
Traders are now pricing in about a 60% chance of a half-percentage-point reduction in the influential fed funds rate, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. That’s up from about 50% on Friday and 30% a week ago. While investors have been clamoring for rate cuts, the Fed normally doesn’t adjust rates by more than a quarter point at a time. A larger cut than that, some analysts say, could send the signal that the Fed sees the possibility of a significant deterioration of the economy.
The yield on 10-year Treasurys, which is sensitive to expectations around interest rates, was down slightly Monday at around 3.64%, near its lowest level since mid-2023.
Gold futures were little changed at around $2,610 an ounce, continuing to trade near record highs, while bitcoin was down about 1% to around $59,000.
Futures Tied to Major Indexes Mixed
27 minutes ago
Futures tied to the Dow Jones Industrial Average were up 0.3%.
S&P 500 futures were down fractionally.
Nasdaq 100 futures were off 0.4%.