US Stock Futures Pause, Traders Pin Hopes On Fed Rate Cut After S&P 500 Slips From Record

The nervousness, typical of a Federal Reserve decision day, is palpable, with the major index futures trading on a flat note early Wednesday. More sideways movement is expected ahead of the Fed decision, scheduled for 2 p.m. ET, and the lackluster mood could give way to volatility as traders react to the language of the policy statement, the updated economic forecasts, the dot plot, and Chair Jerome Powell’s comments at the post-meeting press conference.

Meta Platforms, Inc. (META) could be in the spotlight as the Mark Zuckerberg-led company kicks off its 2-day Meta Connect conference.

As of 4:10 a.m. ET on Wednesday, the Nasdaq 100 futures climbed 0.09%, the S&P 500 futures, and the Dow futures were flat.

A report that showed resilient retail sales data for August tempered market optimism on Tuesday, with the S&P 500 and the Nasdaq Composite retreating from their all-time highs. The Dow Jones Industrial Average pulled further away from its peak.

Traders also chose to stay on the sidelines to see off the Fed decision.

The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) fell 0.14% and 0.08%, respectively. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Shares Russell 2000 ETF (IWM) slipped 0.28% and 0.16%, respectively.

The key economic events of the day are:

• Fed decision (along with SEP and dot plot): 2 p.m. ET
• Powell’s press conference: 2:30 p.m. ET
• Housing starts and building permits: 8:30 a.m. ET

Cracker Barrel (CBRL), General Mills (GIS) and newly-public digital asset platform Bullish (BLSH) earnings are due on Wednesday.

The crude oil rally has paused, and the commodity is modestly lower early Wednesday ahead of the Fed decision. Meanwhile, gold futures, although holding above the $3,700 an ounce level, have come off their record highs. The 10-year U.S. Treasury note yield was at 4.024% early Wednesday. The dollar has firmed up against its major counterparts.

The major Asian markets closed the pre-Fed decision session on a mixed note. The Hong Kong market climbed sharply on tech strength, and the Chinese market also capitalized on it, while the Taiwanese, South Korean and Australian markets moved to the downside.

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