US Stock Futures Show Little Movement Amid Rising Rate Uncertainty; Inflation Data Anticipated

U.S. stock index futures remained steady in evening trading on Monday after a strong payroll report raised questions about the Federal Reserve’s plans to implement significant interest rate cuts.

These uncertainties were compounded by expectations of important inflation data scheduled for release later in the week, which could dampen hopes for rate cuts if inflation remains persistent.

Wall Street saw a considerable decline on Monday as traders adjusted their expectations regarding the Fed’s interest rate decisions, influenced by a range of negative factors.

S&P 500 Futures held steady at 5,746.50 points, while Nasdaq 100 Futures remained unchanged at 19,992 points. Dow Jones Futures dipped slightly to 42,235.0 points.

### Fed Expected to Cut Rates by 25 Basis Points in November

The robust payroll figures indicated resilience in the U.S. economy, prompting traders to significantly lower their predictions for future Fed rate cuts. Currently, traders are estimating an 80.9% probability that the Fed will reduce rates by 25 basis points in November, with a 19.1% chance that no rate cut will occur.

Market participants are also adjusting their expectations for a higher terminal rate in the current easing cycle. The central bank had previously reduced rates by 50 basis points in September and indicated the onset of an easing cycle, while still emphasizing a data-driven approach for future changes.

The minutes of the September meeting will be released on Wednesday, while the consumer price index data scheduled for Thursday will be closely monitored for signs of persistent inflation.

### Wall Street Declines as Rate Expectations Shift

As expectations for reduced rate cuts firmed, Wall Street experienced significant losses on Monday. The S&P 500 fell nearly 1% to 5,695.94 points, the NASDAQ Composite dropped 1.2% to 17,926.04 points, and the Dow Jones Industrial Average declined 0.9% to 41,954.24 points, retreating from recent record highs.

Sell-offs in major technology stocks contributed to the downturn, particularly after Alphabet Inc. was mandated to revamp its Android mobile application store. Negative analyst commentary on Amazon and Apple also fueled declines in these prominent companies.

Additionally, market sentiment was affected by heightened concerns regarding the escalating conflict in the Middle East and the looming threat of Hurricane Milton, expected to make landfall this week as the U.S. grapples with the aftermath of Hurricane Helene.

Looking ahead, the third-quarter earnings season is set to commence later this week, with several major banks preparing to report their results.