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Stock futures are little changed ahead of pivotal Fed rate decision

1 h ago

U.S. equity futures were little changed Tuesday evening ahead of a pivotal Federal Reserve interest rate decision that could mark the start of a new hiking cycle, with traders pricing in a 92% probability of a quarter-point hike. Dow Jones Industrial Average futures rose 56 points (0.1%), while S&P 500 and Nasdaq-100 futures each gained 0.1%. The Fed’s decision comes amid White House pressure to hold rates steady; Council of Economic Advisers chairman Christopher Phelan told CNBC that raising rates would be a “mistake,” noting inflation data is trending in the right direction. The August consumer price index showed a 12-month rate of 3.4%, cooling from May’s 4.2% high, though core CPI rose 0.3% month-over-month, exceeding expectations. Current target rates stand at 3.5%–3.75%, with odds of an additional quarter-point hike at 45% for October and 30% for December. In Asia, markets were mixed Wednesday: Japan’s Nikkei 225 fell 0.17%, the Topix added 0.55%, South Korea’s Kospi was flat, and Australia’s S&P/ASX 200 climbed 0.24%. Crude oil prices surged Tuesday after Saudi Arabia reportedly cancelled shipments following drone attacks on a key export pipeline; U.S. West Texas Intermediate jumped 4.4% to $105.83 per barrel, its highest close since May 19, while Brent crude rose 2.9% to $108.75. Treasury yields spiked on inflation expectations, with the 10-year above 5% and the 30-year at 5.369%. U.S. stocks fell Tuesday amid the tense geopolitical backdrop: the Dow dropped 0.63%, the S&P 500 lost 0.45%, and the Nasdaq Composite declined 0.78%. Semiconductor, cloud, and other technology stocks mostly declined after large language model company heads discussed potentially slowing product releases.