Stock Futures Poised to Trade Ahead of Fed Rate Decision

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Stocks are poised to start a new week of trading in New York on Monday. (Getty Images)

Key Points

Stock futures are set to begin trading ahead of the Federal Reserve’s interest rate decision.
Markets largely expect Federal Reserve Chairman Kevin Warsh to deliver a rate increase after the policy meeting on Tuesday and Wednesday.
The Dow Jones Industrial Average dropped 1.6% last week, marking its worst week since March.

Stock futures are set to begin trading later on Sunday ahead of the Federal Reserve’s interest rate decision this week.

Stocks fell last week. The Dow Jones Industrial Average dropped 1.6% in its worst week since March, while the S&P 500 index shed 0.8% and the Nasdaq Composite fell 0.7%. At the same time, Treasury yields pushed higher during the week, with a respite on Friday. The yield on 10-year Treasury notes hit 4.97%, the highest since October 2023, and the 30-year bond yield rose above 5.35% for the first time since 2007.

Markets largely expect Fed Chairman Kevin Warsh will deliver a rate increase after the Federal Open Market Committee meets this Tuesday and Wednesday.

Traders put the probability of a rate increase at more than 86%, according to the CME’s FedWatch tool.

Wall Street will be eagerly awaiting Warsh’s post-decision press conference, even if he has scrapped forward guidance. Investors will be trying to discern if, in the event rates do rise, it’s the start of a longer cycle or just a pump of the brakes.

Write to Liz Moyer at liz.moyer@barrons.com

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