United States stock futures were trading slightly higher on Sunday evening (Monday AEST) as investors turned their focus to the Federal Reserve’s key policy meeting this week.
By 9:10 am AEST (11:10 pm GMT), Dow Jones Industrial Average futures, S&P 500 futures, and Nasdaq 100 futures each traded 0.1% higher.
The major averages closed out a strong week, with the Nasdaq advancing 2% for a second consecutive weekly gain and notching a record close. The S&P 500 added 1.6%, marking its best weekly showing since early August, while the Dow gained for the first time in three weeks.
On the data front, preliminary University of Michigan figures showed consumer sentiment fell 2.8 points to 55.4 in September, missing expectations of 58.
The latest economic readings have bolstered bets that the Fed will cut interest rates when it concludes its two-day meeting on Wednesday.
According to the CME Group FedWatch Tool, markets were pricing in a 96% probability of a quarter-point reduction and just a 3.6% chance of a larger 50 basis-point move.
ANZ analysts noted: “On the inflation front, while there are certainly pockets of price increases, there is no evidence of broad-based or sustained inflation.
"We expect the Fed will continue to characterise tariff-driven inflation spikes as ‘one-offs’. The dovish tilt at the July FOMC meeting suggests that a 50bp rate cut could be discussed at the September meeting, but the likelihood of a 50bp cut this week is low.
"A 50bp cut may signal panic; so the Fed would be more likely to signal its intent to cut further and in larger increments if needed.”
Lower rates would continue to underpin equity markets, which have drawn momentum from enthusiasm over artificial intelligence despite concerns about the economic outlook.
Investors are also watching whether Stephen Miran will be confirmed as a Federal Reserve governor in time to participate in this week’s FOMC meeting.
Looking ahead, Monday’s release of the Empire State Manufacturing Index will be closely watched, with economists expecting a sharp decline to 3 from the prior reading of 11.9.
