Investors Reassess Fed Rate Cuts Amid High Job Growth

U.S. stock index futures fell as investors revised expectations on Federal Reserve rate cuts. Despite strong job growth, Treasury yields rose, affecting tech stocks. However, optimism remains about the economy. Key inflation data and third-quarter earnings reports are awaited, with Goldman Sachs revising its S&P 500 target up.

U.S. stock index futures dropped Monday as investors adjusted their expectations for Federal Reserve rate cuts this year. The revision comes ahead of essential inflation data, remarks from policymakers, and the third-quarter earnings season starting soon.

The possibility of a 25 basis point rate cut at November's Fed meeting stands at over 93%, as revealed by the CME's FedWatch tool. A robust September non-farm payrolls report last Friday showed significant job additions, contradicting previous market hopes for a 50 basis point cut.

Meanwhile, U.S. Treasury yields soared, impacting rate-sensitive tech stocks like Nvidia, Amazon, and Apple. Despite this, optimism persists about the economy's strength, with Goldman Sachs raising the S&P 500 target to 6,000 by the end of 2024.

(With inputs from agencies.)