US stock index futures steady with Fed meeting, rate cut on tap

U.S. stock index futures moved little in evening deals on Monday, steadying after a mixed session on Wall Street amid speculation over a widely expected interest rate cut by the Federal Reserve. 

A rally in technology stocks ran dry, while traders made some plays into economically sensitive sectors, which saw the Dow Jones Industrial Average hit record highs. 

S&P 500 Futures steadied at 5,696.75 points, while Nasdaq 100 Futures rose 0.1% to 19,676.25 points by 19:36 ET (23:36 GMT). Dow Jones Futures were flat at 42,040.0 points.  Fed awaited, markets favor 50 bps cut 

The Fed is widely expected to cut interest rates at the conclusion of a two-day meeting on Wednesday, with market expectations shifting more towards a bigger, 50 basis point cut in recent sessions.

Traders were seen pricing in a 68% chance for a 50 bps reduction and a 32% chance for a 25 bps cut, CME Fedwatch showed.

Uncertainty over the scale of the cut had spurred some volatility on Wall Street in recent sessions, although both the S&P 500 and the Dow remained close to record highs. 

But regardless of the scale of Wednesday’s cut, the Fed is widely expected to kick off an easing cycle that could bring more interest rate cuts in the coming months. 

Recent data showed that while the labor market cooled, inflation remained sticky- a trend that could complicate the Fed’s plans to cut rates further.  Wall St mixed, Dow at record high 

Caution over the Fed saw Wall Street clock a mixed session on Monday, although some flows into economically sensitive sectors saw the Dow hit a record high.

The Dow Jones Industrial Average rose 0.6% to a record-high close of 41,622.08 points, while the S&P 500 rose 0.1% to 5,633.09 points. The NASDAQ Composite lagged on losses in tech stocks, falling 0.5% to 17,594.32 points.  Intel surges on foundry plans, Microsoft announces bumper buyback

Among major aftermarket movers, Intel Corporation (NASDAQ:INTC ) rallied over 7% after it announced plans to spin off its foundry business, and that it will sell off part of its stake in Altera. 

The plan will see the chipmaker turn its foundry business into a unit with its own board, and will also allow the cash-burning unit to raise capital from external investors. 

The move comes just a month after Intel clocked heavy share losses on disappointing quarterly earnings.

Intel also announced a deal to make a custom chip for Amazon.com Inc's (NASDAQ:AMZN ) web services unit.

Shares of Microsoft Corporation (NASDAQ:MSFT ) rose slightly after the firm announced a $60 billion share buyback program, and also hiked its quarterly dividend by 10%. 

Source: Investing.com