U.S. Stock Futures Inch Up as Investors Await Federal Reserve’s Decision
Traders on the floor of the New York Stock Exchange are keeping a close eye on the Federal Reserve’s upcoming policy decision, causing U.S. stock futures to inch up on Monday morning.
According to the NYSE, futures tied to the Dow Jones Industrial Average added 48 points, or 0.13%. Meanwhile, the S&P 500 and Nasdaq 100 futures also ticked up 0.14% and 0.1% respectively.
The previous trading week saw both the broad market index and the Nasdaq in the red for the second consecutive week, while the Dow managed to end the week 0.1% higher.
Investors are eagerly anticipating that the Federal Reserve will keep interest rates steady. However, they will be closely watching for any indications of the central bank’s stance on inflation.
Quincy Krosby, the chief global strategist for LPL Financial, noted the importance of how the Fed presents their pause in interest rate decisions, stating, “How the Fed delivers the pause is crucial for November and December rate expectations, but whether it’s presented with a dovish or hawkish tilt is what matters most for financial markets.”
Recent inflation data has largely aligned with economists’ expectations. While the producer price index exceeded expectations, the core PPI, which excludes food and energy, matched estimates. Additionally, the core consumer price index slightly exceeded expectations in August.
However, Krosby believes that higher prices may be on the horizon due to a strong labor market. The ongoing United Auto Workers strike in Detroit could also contribute to upward pressure on prices.
“Given the UAW strike with the potential for a substantial pay package, coupled with labor’s recent successful negotiations, underpinning a broad swath of higher wages, the FOMC is faced with a likelihood of resulting higher prices,” said Krosby.
In the meantime, policymakers will be relying on economic data releases to inform their decisions. Monday will see the release of September’s Housing Market Index data, as well as the announcement of September’s Business Leaders Survey results by the New York Fed.