U.S. stock futures flat as investors await Fed meeting - and likely rate cut

By Mike Murphy

Vehicles drive past the Marriner S. Eccles Federal Reserve building in Washington, DC.

U.S. stock futures were little changed Sunday, as investors anticipated another interest-rate cut by the Federal Reserve later this week.

Dow Jones Industrial Average futures (YM00) , S&P 500 futures (ES00) and Nasdaq-100 futures (NQ00) were trading about flat late Sunday.

The price of bitcoin (BTCUSD), which has been mired in a monthlong slump, rose above the $91,000 level. Gold (GC00) and silver futures (SI00) fell, while West Texas crude futures (CL.1) inched higher. The ICE U.S. Dollar Index DXY, which measures the greenback against a basket of rival currencies, edged lower.

Stocks ended higher Friday, as the S&P 500 SPX and Nasdaq Composite COMP extended their four-day winning streaks. For the week, the Dow DJIA rose 0.5%, while the S&P 500 advanced 0.3% and the Nasdaq gained 0.9%. All three major indexes rose for the second consecutive week.

A delayed inflation report released Friday showed consumer prices increased only slightly in September, adding to the Fed rate-cut expectations.

See: This week's Fed meeting will highlight the central bank's challenge: Preventing a recession while tackling inflation

The Fed's rate-setting committee will meet Tuesday and Wednesday, with Fed Chair Jerome Powell scheduled to speak Wednesday afternoon. The CME FedWatch tool puts the chances of a 25-basis-point rate cut at about 86% as of Sunday.

After a volatile November on Wall Street, stocks have regained momentum over the past two weeks, as fears of an AI bubble have subsided and as economic data is being reported again after the record-long federal shutdown.

Read more: The Fed meeting this week will determine if investors get new all-time highs or coal for Christmas

While a rate cut is expected Wednesday, all ears will be tuned to Powell's speech, which investors hope will lay out the Fed's path for interest-rate policy in 2026. More uncertainty, especially with Powell's term as chair ending in May, could cause volatility in markets.

In a Friday note, analysts at BNP Paribas said they expect Powell to announce a rate cut, and "will likely raise the bar for further easing at the press conference."

President Donald Trump said last week he's made a decision on Powell's successor but won't announce it yet, with expert putting Kevin Hassett, director of Trump's National Economic Council, as the front-runner. Hassett, like Trump, has advocated aggressively cutting rates further.

"We believe policy will be stimulative next year," the BNP Paribas analysts added. "Our base case is that regardless of who becomes the next Fed leader, policy is largely determined by the U.S. economic outlook."

Also read: The Fed's biggest decision this week could have nothing to do with interest rates

-Mike Murphy

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12-07-25 2304ET