Market Awaits Fed Rate Decision Amid Economic Uncertainty

U.S. stock index futures were steady on Monday as investors awaited the Federal Reserve's key monetary policy decision. The market has experienced gains following hints of rate cuts, but mixed economic data has caused uncertainty. Futures showed varied performance, with small-cap stocks doing notably well amid lower borrowing costs.

U.S. stock index futures remained steady on Monday as investors exercised caution ahead of this week's crucial Federal Reserve monetary policy decision. Anticipation for reduced borrowing costs has stirred market optimism, though mixed economic data and recent analyst comments have led to uncertainty about the upcoming decision.

Fed Chair Jerome Powell's hints last year of a potential rate cut have fueled a bull run, bringing the S&P 500 and Dow near record levels. However, swirling economic signals and new commentary are leading traders to revise their expectations for the September 17-18 meeting. Currently, there is a 59% probability of a 50-basis-point cut, up from 30% last week.

The market's primary focus is not just the rate cut itself but also subsequent Fed communication. The impact of recent rate-sensitive growth stocks was mixed. Nvidia dropped 0.9%, Meta inched up 0.15%, and Tesla increased by 0.44% in premarket trading. Meanwhile, Intel jumped 2% due to securing federal grants for semiconductor production for the Department of Defense. Crypto stocks fell in line with a 2% drop in bitcoin, while Alcoa gained 1.4% after announcing the sale of its stake in a Saudi joint venture.

(With inputs from agencies.)