US stock futures muted ahead of Fed meeting

U.S. stock index futures moved little on Sunday evening as caution before an upcoming Federal Reserve meeting this week kept investors largely to the sidelines in anticipation of more cues on interest rates. 

Futures were muted after a largely middling Friday session on Wall Street, as recent economic data showed inflation remaining sticky in November- a trend that could limit the Fed’s plans to lower interest rates. 

S&P 500 Futures steadied at 6,128.0 points, while Nasdaq 100 Futures were flat at 22,074.25 points by 18:33 ET (23:33 GMT). Dow Jones Futures were flat at 44,367.0 points.  Fed rate cut on tap, 2025 outlook in focus 

The Fed is widely expected to cut interest rates by 25 basis points at the conclusion of a two-day meeting on Wednesday, after the central bank kicked off an easing cycle earlier in the year.

The move will bring rates down by a total of 100 bps in 2024.

But focus this week will be squarely on the central bank’s plans for future easing, especially in the face of potentially sticky inflation and resilience in the labor market.

Analysts broadly expected the central bank to signal a slower pace of rate cuts in the coming year, with recent comments from Fed officials also suggesting as much.

Rates are also expected to remain high in the long term, especially with the prospect of inflationary policies under incoming President Donald Trump. 

Traders were seen pricing in a 79.7% chance the Fed will leave rates unchanged when it meets in January, CME Fedwatch showed.  Wall St close to record highs amid tech strength 

While Wall Street indexes marked a series of middling finishes in recent sessions, they remained in sight of record highs hit earlier in December. Technology stocks were the biggest drivers of these peaks, amid sustained optimism over artificial intelligence. 

Positive earnings from chipmakers such as Broadcom Inc (NASDAQ:AVGO ) also contributed to optimism over AI, as did anticipation of new chips from market darling NVIDIA Corporation (NASDAQ:NVDA ). 

The S&P 500 closed flat at 6,051.09 points on Friday, while the NASDAQ Composite rose 0.1% to 19,926.72 points. The Dow Jones Industrial Average fell 0.2% to 43,828.06 points.

Wall Street has been on a tear since Trump’s victory in the 2024 elections in November. But gains have slowed in recent sessions amid growing caution over potentially high interest rates in the coming years. 

Source: Investing.com