Fed’s Bowman to Speak, Boeing’s New Pay Proposal – Market Movers to Watch

US Stock Futures Slightly Higher Amid Fed Commentary and Boeing’s Offer to Striking Workers

US stock futures are showing a slight uptick as traders analyze recent remarks from Federal Reserve policymakers regarding the significant interest rate cut announced last week. Investors are particularly focused on comments from Fed Governor Michelle Bowman, who was the sole dissenter opposing the large rate reduction. In parallel, Boeing has presented what it refers to as its "best and final" pay offer to its striking workforce.

1. Futures Edge Up

On Tuesday, US stock futures indicated a modest increase following remarks from Fed officials that supported the recent rate cut, which had boosted equities on Wall Street during the previous session. As of 03:22 ET, the Dow futures contract had risen by 37 points, or 0.1%, the S&P 500 futures were up by 8 points, or 0.1%, and the Nasdaq 100 futures gained 47 points, or 0.2%.

All three major indices—the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite—recorded gains on Monday as investors reacted to the backing from Fed officials, such as Neel Kashkari, Raphael Bostic, and Austan Goolsbee, who advocated for further interest rate cuts moving forward.

Recent data also indicated that US business activity remained steady in September, while average prices for goods and services increased at the fastest rate in six months. These figures, along with the latest personal consumption expenditures price index—an important inflation measure for the Fed—could provide further insight into the state of inflation in the US economy.

Traders are now estimating a roughly 53% likelihood that the Fed will reduce rates by an additional half-point at its upcoming November meeting.

2. Fed’s Bowman to Speak

Market participants will be paying close attention to remarks from Fed Governor Michelle Bowman on Tuesday. She is scheduled to speak at 09:00 ET at an annual convention for bankers in Kentucky.

Bowman’s comments follow her recent expression of concern regarding the sizable rate cut, which she believed might lead to a misinterpretation of the Fed’s stance on inflation. She specifically pointed out that the core personal consumption expenditures price index, which excludes volatile items like food and fuel, remains above the Fed’s 2% target. Bowman remarked, "We have not yet achieved our inflation goal," asserting that a more cautious rate cut would help to avoid unintentional demand stimulation.

3. Boeing Offers Improved Pay Package to Striking Workers

Boeing has offered an enhanced labor agreement to its more than 30,000 striking workers in the Pacific Northwest. However, the union representing these workers has stated it will not put the offer to a vote.

The updated proposal from Boeing includes a 30% general pay increase over four years, improvements to retirement benefits, and a larger ratification bonus for workers who accept the proposal by Friday. Boeing has labeled this its "best and final" offer.

Nonetheless, the International Association of Machinists and Aerospace Workers District 751, which represents the striking employees, rejected the proposal, claiming it was presented without prior discussions. The company, in response, stated that it had communicated the offer directly to union representatives and subsequently to the workers.

Resolving the strike, which began after workers disapproved an earlier compensation package, is crucial for Boeing as analysts warn that a lengthy work stoppage could further strain the company’s finances amid ongoing production delays and increased scrutiny over safety.

4. Chinese Stocks Surge on Stimulus

Chinese stock markets experienced significant gains, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indices both rising more than 4%. Hong Kong’s Hang Seng index also rallied, following the announcement of new stimulus measures from the Chinese government.

Officials revealed plans to stimulate economic growth, including a 50 basis-point cut in bank reserve requirements to enhance liquidity. For the struggling property market, the government is set to reduce mortgage rates on existing loans. Reports indicate the government is preparing to inject at least 500 billion yuan into local stocks to bolster market activity.

These measures follow a short-term repo rate cut by the People’s Bank of China aimed at further enhancing liquidity as the Chinese economy grapples with persistent disinflation and a prolonged downturn in the real estate sector.

5. Crude Prices Rise

Crude oil prices advanced as a result of China’s monetary stimulus and escalating tensions in the Middle East. By 03:23 ET, Brent crude increased by 1.2% to $74.08 per barrel, and US crude futures (WTI) were up by 1.4% at $71.34 per barrel.

The broad stimulus measures from China are expected to enhance demand for crude, given its status as the world’s largest importer. Concurrently, increased military actions in the region, such as Israel’s airstrikes against Hezbollah sites in Lebanon, have raised concerns about potential disruptions in oil supply from this key market, tightening global oil prices.