US Futures Steady Ahead of Fed Rate Decision, CPI Data

US stock index futures slightly rose on Monday as investors chose to observe rather than participate ahead of the conclusion of the Federal Reserve’s meeting and consumer inflation data this week.

The S&P 500 futures expiring in June climbed 0.01% to 5,355.25 points, while the Dow Jones futures eased 0.02% to 38,849.00 points. The NASDAQ 100 futures posted small gains of 0.01% at 19,039.50 points.

Futures were stable after some weakness in US equities on Friday, following higher-than-expected nonfarm payrolls data, a key factor in the Fed’s rate cuts signaled continued resilience in the country’s labor market.

The reading saw the possibility of a September rate significantly waning, resulting in a decline across Wall Street stocks.

Still, Friday’s slide was not enough to pull US main stock indices away from record highs, as strength in heavyweight tech stocks led by artificial intelligence (AI) chip giant Nvidia Corp. provided support.

The S&P 500 index closed 0.11% lower at 5,346.99 points, while the tech-heavy NASDAQ Composite ended with a 0.23% loss at 17,133.13 points. The Dow Jones Industrial Average (DJIA) index fell 0.22% to 38,798.99 points at the close.

The prospect of profit-taking, however, was strong due to high valuations and as risk sentiment eased before the Fed’s decision.

Appetite for risk might also drop amid further political uncertainty in Europe after the European Union (EU) election votes showed the majority being in favor of far-right parties.

Fed’s Interest Rate Decision, US’s May CPI Data In Focus

Investors are now awaiting the end of the Fed’s two-day policy meeting on Wednesday, which is expected to conclude with a decision to leave interest rates unchanged at their current 5.25%-5.5% range.

Cues on a rate cut timeline will also be kept an eye on, considering the performance of the world’s largest economy remained quite robust.

US nonfarm payrolls showed on Friday an increase of 272,000 in May from April’s 165,000, ending higher than forecasts of a 182,000 growth and prompting markets to reduce their expectations for a rate reduction in September.

The central bank’s decision will follow the consumer price index (CPI) data, which is also scheduled for release on Wednesday. The CPI is seen staying at 3.4% in May, above the Fed’s annual 2% inflation target.

Inflation has been the central bank’s primary factor in adjusting interest rates, and stubborn inflation has continued to support the case for extended periods of higher interest rates.

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