US Stock Index Futures Steady as Rate Cut Optimism Eases; Awaiting Further Fed Signals

U.S. stock index futures showed little movement in evening trading on Sunday as a rally sparked by a significant interest rate cut began to lose momentum. Attention now shifts to an array of indications from the Federal Reserve scheduled for this week.

Last week, Wall Street indices surged to record highs following the Fed’s decision to cut interest rates, marking the start of a potential easing cycle. However, gains moderated towards the week’s end, as future rate cuts remain largely dependent on the trajectory of the U.S. economy.

S&P 500 futures stabilized at 5,764.0 points, while Nasdaq 100 futures increased by 0.1% to 20,047.0 points. Dow Jones futures remained unchanged at 42,443.0 points.

### Focus on Fed Signals and PCE Inflation

Several Federal Reserve officials, including Chair Jerome Powell, are scheduled to address the market this week, with Powell speaking on Thursday.

Last week, the central bank implemented a 50 basis point rate cut, marking the commencement of an easing cycle that may involve reductions of up to 125 basis points this year. Although this move propelled Wall Street to record highs, the overall gains were tempered by the Fed’s more cautious outlook for the medium to long term.

The central bank indicated that neutral interest rates are likely to be significantly higher than those observed previously. The pace of the Fed’s easing strategy will largely hinge on economic conditions in the U.S. This Friday, the release of the PCE price index— the Fed’s preferred measure of inflation— is anticipated to provide further insights regarding interest rates. Currently, inflation remains well above the Fed’s annual target of 2%.

### Dow and S&P 500 Near Record Heights

Investor optimism surrounding interest rate cuts propelled both the S&P 500 and the Dow Jones Industrial Average to historic highs last week. Although the NASDAQ Composite also saw gains, recent weaknesses in technology stocks have prevented it from reaching all-time highs.

On Friday, the S&P 500 declined by 0.2% to 5,702.55 points, while the Dow edged up by 0.1% to 42,063.36 points. The Nasdaq Composite dropped by 0.4%, closing at 17,948.32 points.