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Stock futures were flat in overnight trading Tuesday as Wall Street anticipated a long-awaited rate cut from the Federal Reserve following an aggressive multiyear hiking campaign aimed at tamping down hot inflation. Futures tied to the added 28 points, while hovered near the flatline. Futures tied to the edged up about 0.
1%. Wall Street is coming off a mixed session that saw the edge up 0.03% after during intraday trading.
The lost nearly 16 points, while the added 0.2%. Investors remain on high alert ahead of the first expected rate cut from the Fed at the conclusion of its two-day policy meeting Wednesday.
This month's gathering registers as one of the as the Fed readies to unwind its cycle of aggressive hikes, which started in March 2022. Rate cuts generally benefit companies' earnings growth and will usher in a welcome reprieve following a prolonged period of high borrowing costs and sticky inflation. The cutting cycle may also yield more gains for an already-strong market on a record-setting streak, with the S&P 500 already up 18% this year.
shows that since 1974, the index has rallied an average of 6.4%, 9.8% and 15.
6% in the three, six and 12 months following an initial cut, respectively. Although a cut appears imminent, traders are divided over the magnitude of the move. Tool shows traders pricing in a 63% chance of a 50 basis point cut, and 37% odds of a 25 basis point move.
Despite these market expectations, some investors remain cautious about cutting rates too much, too soon. Peter Cecchini, Axonic Capital's director of research, "unusual" as the first move in a cutting cycle from the Fed given the current state of the housing market. "This is not really the environment where I think the Fed needs to do a 50 basis point cut as a preemptive measure, when historically it's never done so," he told CNBC's " " on Tuesday.
and shares moved slightly higher in overnight trading after announcing their participation in a group to and power infrastructure for AI. The companies will be part of a group known as Global AI Infrastructure Investment Partnership, which will target pulling together $30 billion of initial capital. Stock futures opened little changed Tuesday evening ahead of the Fed's rate decision.
Futures tied to the added 15 points, while hovered near the flatline. Futures tied to the edged up 0.05%.
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