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U.S. stocks saw modest gains on Monday, with trading activity subdued as investors awaited the Federal Reserve’s final policy meeting of the year.
By 06:10 ET (11:10 GMT), Dow Jones Futures rose 50 points (0.1%), S&P 500 Futures added 8 points (0.1%), and Nasdaq 100 Futures climbed 55 points (0.3%). This cautious movement followed a relatively uneventful Friday session, with markets reacting to data indicating persistently sticky inflation in November, which could complicate the Fed’s interest rate strategy.
Fed Expected to Cut Rates, Outlook for 2025 in Focus
The Federal Reserve is widely anticipated to reduce interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday. This would mark a cumulative 100-basis-point reduction for 2024, as the central bank continues its easing cycle.
However, the primary focus will be on the Fed’s guidance for 2025 and beyond, especially given concerns over resilient inflation and a strong labor market. Analysts expect the Fed to signal a more cautious pace of rate cuts in 2025, a sentiment echoed by recent statements from Fed officials.
Market expectations reflect this uncertainty, with traders pricing in a 79.7% chance that the Fed will leave rates unchanged at its January meeting, according to the CME FedWatch tool.
MicroStrategy Joins Nasdaq 100
On the corporate front, MicroStrategy (NASDAQ:MSTR) is drawing attention after its inclusion in the Nasdaq 100 index. This move is expected to bolster the software company, known for its substantial Bitcoin holdings, and could attract increased investor interest.
As markets remain in wait-and-see mode, this week’s Fed decision will be pivotal for shaping investor sentiment heading into the new year.
