U.S. Stock Futures Flat as Traders Await Fed’s Rate Cut Decision

U.S. stock index futures were steady on Friday as investors remained cautious about the size of the Federal Reserve’s expected interest rate cut next week. Speculation about a more substantial 50-basis point (bps) cut has increased, with the CME FedWatch Tool showing a 41% chance of such a move, up sharply from 14% on Thursday. The uncertainty surrounding the rate decision has kept traders on edge.

Former New York Fed President Bill Dudley supported the idea of a 50-bps cut, citing a strong case for more aggressive easing. Deutsche Bank analysts noted that the rate decision would likely be one of the most uncertain in recent years, given the rapidly shifting expectations fueled by articles from the Wall Street Journal and Financial Times.

Meanwhile, the dollar weakened, and U.S. government bond yields fell, reflecting the market’s shifting sentiment toward a larger rate cut. Earlier bets had leaned toward a smaller 25-bps cut, especially after a higher-than-expected producer prices report this week.

Boeing Shares Fall Amid Strike

Boeing shares dropped 3.9% in premarket trading after the company’s West Coast factory workers went on strike early Friday, following the rejection of a contract deal. This development adds pressure to the already embattled aerospace manufacturer.

Market Movements

At 05:06 a.m. ET, Dow E-minis were up slightly by 32 points (0.08%), while S&P 500 E-minis and Nasdaq 100 E-minis posted modest gains of 0.15% and 0.07%, respectively. Futures for the Russell 2000 small-cap index rose 0.6%, indicating some optimism for smaller, economically sensitive stocks.

Adobe shares fell 8.3% after the company’s forecast for fourth-quarter earnings came in below expectations, signaling tougher competition and weaker demand for its AI-powered tools. Moderna’s stock also declined 3.5%, extending its losses after the company delayed its break-even goal by two years and downgraded its 2025 sales forecast.

In broader market news, Wall Street saw its largest equity outflows since April, according to Bank of America, as investors reassess their positions ahead of the Fed meeting.

Later in the day, the University of Michigan’s consumer sentiment survey for September will provide further insights into economic conditions, with results expected at 10 a.m. ET.