U.S. stock futures retreated from their record highs, with investor focus now turning towards the Federal Reserve’s next moves. After a period of unprecedented gains, traders are bracing for possible changes in monetary policy that could influence the direction of interest rates and economic growth. The Fed’s influence remains a key factor in guiding investor sentiment and market direction.
U.S. stock futures edged lower on Tuesday, poised to retreat from record highs as investors awaited the start of a Federal Reserve meeting likely to outline the future path of interest rates. Recent CPI figures and the Fed’s projections will be under intense scrutiny as conflicting economic reports have muddled the view on the economy’s true health.
Futures on the S&P 500 (ES=F) and the tech-centric Nasdaq 100 (NQ=F) dipped about 0.3%, after both indices recently achieved all-time closing highs. Dow Jones Industrial Average futures (YM=F) slid 0.4%.
Stocks have shown resilience despite market uncertainty about an economy that could be overheating or cooling too quickly. Recent mixed data has led to skepticism regarding the Fed’s earlier projection of three rate cuts in 2024. Many investors now expect only one reduction before the year ends. The CME’s FedWatch tool indicates a 54.4% probability that the Fed will implement its first rate cut in September.
Later in the week, market participants will also be watching the release of the May Producer Price Index, import and export price data, and the initial University of Michigan Consumer Sentiment Survey.
In addition, the National Federation of Independent Business survey reported that small-business confidence and hiring plans surged to their highest levels this year in May. However, the looming U.S. presidential election drove the Uncertainty Index to its highest point in nearly four years.
In addition, market participants are looking ahead to May’s consumer price data, set for release on Wednesday, which will be crucial in the Fed’s deliberations on rate cuts.
