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

US stock futures have seen a modest increase as traders evaluate the latest comments from Federal Reserve officials regarding last week’s significant interest rate cut. Investors are keeping a close eye on remarks from Fed Governor Michelle Bowman, who was the sole dissenting voice against the sizable rate reduction. In a separate development, Boeing has put forward what it terms its “best and final” pay proposal to striking employees.

### 1. Futures Edge Up

On Tuesday, US stock futures pointed upward, largely influenced by comments from Fed officials that supported the substantial rate cut which had buoyed stocks on Wall Street during the previous session. By 03:22 ET, the Dow futures had risen by 37 points or 0.1%, S&P 500 futures were up by 8 points or 0.1%, and Nasdaq 100 futures gained 47 points or 0.2%.

The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all registered gains on Monday, as investors reacted to supportive statements from Fed officials about last week’s 50-basis point rate reduction. Fed representatives, including Neel Kashkari, Raphael Bostic, and Austan Goolsbee, expressed their backing for this move and advocated for additional rate cuts in the coming months.

Additionally, new data revealed that US business activity remained stable in September, with average prices for goods and services rising at the fastest rate in six months. These figures, coupled with the upcoming release of the personal consumption expenditures (PCE) price index—favored by the Fed as an inflation measure—could shed light on price growth in the US economy.

Traders are estimating a roughly 53% likelihood that the Fed will implement another half-point rate cut at its November meeting.

### 2. Fed’s Bowman to Speak

Investors will be paying attention to comments from Fed Governor Michelle Bowman on Tuesday. Scheduled to speak at 09:00 ET at the Kentucky Bankers Association Annual Convention, Bowman had previously expressed her preference for a quarter-point reduction due to fears that a more significant cut could be misinterpreted as a signal that inflation was under control.

Bowman pointed out that the core PCE inflation rate, which excludes volatile categories such as food and energy, remains above the Fed’s preferred 2% target. She emphasized, “We have not yet achieved our inflation goal,” and remarked that a more cautious approach to rate cuts could prevent undue stimulation of demand.

### 3. Boeing Offers Improved Pay to Strikers

Boeing has made an enhanced labor offer to over 30,000 striking workers in the US Pacific Northwest, although their union has declined to put this proposal to a vote. The latest offer includes a 30% salary increase over four years, enhanced retirement benefits, and a larger signing bonus if workers accept the proposal by Friday. Boeing has labeled this as its “best and final” offer.

However, the International Association of Machinists and Aerospace Workers District 751, representing the striking employees, rejected the proposal, stating it was unexpectedly presented without prior negotiation. The company has asserted it communicated the offer to both the union and workers directly.

Resolving the strike—sparked by workers rejecting an earlier compensation package—has become critical for Boeing, as analysts warn that a prolonged work stoppage could further strain the company’s finances during a period marked by production delays and scrutiny over safety practices.

### 4. Chinese Stocks Surge on Stimulus

On Tuesday, the Shanghai Shenzhen CSI 300 and Shanghai Composite indices rose by more than 4%, while the Hang Seng index in Hong Kong also experienced a rally, spurred by newly announced stimulus measures from Chinese authorities.

The People’s Bank of China is set to decrease reserve requirements for banks, aiming to enhance liquidity. Additionally, measures targeting the struggling property market include reduced mortgage rates for existing loans. Reports suggest that the government plans to inject at least 500 billion yuan ($70.8 billion) into local stock markets.

These actions follow a recent cut in the short-term repo rate by the PBOC, aimed at boosting liquidity. With the world’s second-largest economy facing persistent disinflation and a protracted downturn in the property market, officials are eager to stimulate growth.

### 5. Crude Prices Rise

Oil prices increased on Tuesday, supported by monetary stimulus from China and rising tensions in the Middle East. By 03:23 ET, Brent crude had climbed 1.2% to $74.08 per barrel, while US crude futures (WTI) gained 1.4% to trade at $71.34 per barrel.

The broad stimulus measures from China have heightened expectations for increased crude demand from the world’s largest importer. Concurrently, airstrikes carried out by Israel against Hezbollah positions in Lebanon have raised concerns over potential supply disruptions from this oil-rich region, tightening the global market dynamics.