Futures Update: Dow up 0.02%, S&P 500 up 0.09%, Nasdaq up 0.16%
September 23 (Reuters) – U.S. stock index futures were muted on Monday as investors awaited comments from policymakers and economic data to assess the outlook for interest rates and the health of the economy, following the Federal Reserve’s recent easing cycle.
The Fed’s significant monetary policy shift last week supported Wall Street’s major indices, contributing to monthly gains that defied the historical trend of weaker equities in September.
After a year of strong rallies, the S&P 500 is just shy of an all-time high, while the blue-chip Dow closed at a record high on Friday. However, caution prevails as the benchmark index’s valuations exceed long-term averages.
At 5:36 a.m. ET, Dow E-minis were up 7 points (0.02%), S&P 500 E-minis rose 5.25 points (0.09%), and Nasdaq 100 E-minis increased by 32.5 points (0.16%).
Recent data indicated that equity fund managers increased their net long positions in S&P 500 futures contracts for the week ending September 17.
This week, all eyes will be on Fed officials, including Chair Jerome Powell on Thursday, as markets anticipate insights on the economy, which analysts generally view as robust, and the outlook for monetary policy.
Fed Governor Christopher Waller influenced trader expectations last session by suggesting that upcoming inflation data might fall short of the Fed’s 2% target. In contrast, Michelle Bowman, who voted for a 25 basis point cut at the last meeting, noted that price pressures remain persistent.
This follows a strong rally spurred by an unexpectedly large half-point interest rate cut from the Federal Reserve.
Traders now see a 53% chance that the central bank will ease by 50 basis points next, up from 29.3% a week ago, according to CME Group’s FedWatch Tool, while expectations for a 25 basis point reduction stand at 47%.
Remarks from Fed presidents, including Raphael Bostic, Austan Goolsbee, and Neel Kashkari, are scheduled for today. Analysts at UBS noted, “The Fed made a strong case at its September meeting that the U.S. economy is on solid ground, with few signs of an impending recession. However, markets are likely to remain sensitive to weak economic releases.”