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U.S. stock index futures pointed slightly higher on Wednesday as investors awaited a highly anticipated decision by the Federal Reserve, which is expected to result in the first interest rate cut since March 2020. By 06:22 ET (10:22 GMT), S&P 500 futures were up by 8 points (0.1%), Nasdaq 100 futures had risen by 33 points (0.2%), and Dow Jones futures had added 65 points (0.2%).
Rate Cut Expectations
The market is pricing in a higher likelihood of a 50-basis-point rate cut, with the FedWatch Tool from the CME Group showing a 65% chance of this outcome, compared to a 35% chance for a smaller 25-bps reduction. The decision remains a “close call,” especially after U.S. retail sales unexpectedly rose in August, reflecting the resilience of the economy and consumer spending.
The upcoming Fed rate decision will set the tone for how the central bank might manage future rate cuts, with markets expecting at least 100 basis points of reductions by the end of 2024.
Recent Market Performance
On Tuesday, the S&P 500 and Dow Jones Industrial Average were relatively unchanged following a volatile session, while the Nasdaq Composite gained 36 points (0.2%). The positive retail sales report helped the indexes reach record highs earlier in the day.
Corporate Movements
- U.S. Steel (NYSE: X) shares rose in premarket trading following a report from Bloomberg News that Nippon Steel received an extension on its $14.1 billion offer to acquire U.S. Steel. A final decision is now expected after the 2024 U.S. elections.
- Shares of 23AndMe Holding Co (NASDAQ: ME) dropped after all seven independent directors resigned, citing dissatisfaction with the take-private offer from CEO Anne Wojcicki.
Investors are watching how today’s Fed decision could influence stock performance, especially as markets navigate mixed signals on inflation, labor demand, and overall economic strength.
