The major stock market futures are indicating a nearly unchanged start on Wednesday, suggesting that stocks may continue the uninspiring trend observed in the prior session. Market participants might remain on the sidelines as they await the Federal Reserve’s much-anticipated monetary policy announcement later today. With the Fed widely anticipated to reduce interest rates by 25 basis points, traders will focus on the accompanying statement and officials’ latest economic projections for insights into the future trajectory of rates. There is a 94 percent probability of a quarter-point rate cut by the Fed, with a modest 6 percent likelihood of a half-point reduction.
The Fed is anticipated to reduce rates by an additional 25 basis points during its meetings in October and December. However, Fed Chair Jerome Powell is expected to indicate that any future rate cuts will be contingent on forthcoming economic data. However, a decline in shares of Nvidia may impact the markets, with the AI favorite and market leader dropping by 1.6 percent in pre-market trading. Nvidia is facing challenges following a report indicating that China’s internet regulator has prohibited the nation’s largest technology firms from purchasing the company’s artificial intelligence chips. Following a mostly positive close on Monday, stocks exhibited a sense of indecision throughout the trading day on Tuesday. The Nasdaq and the S&P 500 hit new record intraday highs during early trading but spent the remainder of the day hovering around the unchanged line.
The major averages ultimately concluded the day with slight declines. The Dow decreased by 125.55 points, representing a 0.3 percent decline, settling at 45,757.90. The Nasdaq fell by 14.79 points, or 0.1 percent, to reach 22,333.96, while the S&P 500 saw a slight drop of 8.52 points, also 0.1 percent, closing at 6,606.76. The volatile trading occurred as traders appeared hesitant to take substantial actions with the Federal Reserve commencing its two-day monetary policy meeting. In the meantime, traders mostly overlooked a report indicating that retail sales increased significantly more than anticipated in August. Report says that retail sales rose by 0.6 percent in August, aligning with an upwardly adjusted increase from July. Analysts had anticipated retail sales to rise by 0.2 percent, in contrast to the 0.5 percent growth initially reported for the prior month. In line with the tepid performance of the overall markets, the majority of the key sectors concluded the day with only slight fluctuations.
Gold stocks experienced a notable decline, with the NYSE Arca Gold Bugs Index falling by 2.3 percent, even as the price of the precious metal saw a slight uptick. Significant weakness was also observed in utility stocks, as indicated by the 1.6 percent decline recorded by the Dow Jones Utility Average. Conversely, energy stocks surged significantly in tandem with the rise in crude oil prices, propelling the NYSE Arca Oil Index and the Philadelphia Oil Service Index up by 2.2 percent.