U.S. Stock Futures Steady as Investors Await Fed Rate Cut Decision

U.S. stock futures traded flat Sunday evening after Wall Street ended last week with strong gains, as investors braced for a potential Federal Reserve interest rate cut. By 20:11 ET (00:11 GMT), S&P 500 futures held at 6,644.75, Nasdaq 100 futures hovered at 24,349.0, and Dow Jones futures remained steady at 45,859.0.

The Dow, S&P 500, and Nasdaq all closed at record highs last week, driven by growing optimism that the Fed will ease policy. The S&P 500 rose 1.6%, the Dow gained 1%, and the Nasdaq advanced 2% for the week. Weaker U.S. labor market data fueled these expectations, as non-farm payrolls grew by only 22,000 in August, unemployment climbed to 4.3%, and weekly jobless claims hit their highest level in nearly four years.

Inflation readings were mixed, with the Consumer Price Index rising 0.4% in August and annual inflation ticking up to 2.9%. Core CPI increased 0.3% month-over-month and 3.1% year-over-year, aligning with forecasts. Despite slightly hotter inflation, markets remain confident in a 25-basis-point Fed rate cut this week, with a slim chance of a deeper 50-basis-point move, according to CME’s FedWatch tool. Traders are now awaiting updated Fed projections and remarks from Chair Jerome Powell for guidance on monetary policy through year-end.

AI-driven optimism also lifted equities, particularly in the tech sector. Oracle (NYSE:ORCL) surged after raising its cloud infrastructure revenue outlook and securing major AI contracts, reinforcing hopes that corporate AI investment will continue to drive growth.

With record market highs, Fed easing expectations, and momentum in artificial intelligence, investors are closely watching whether this week’s Fed decision will sustain Wall Street’s rally.