Stock Futures Set to Trade Ahead of Fed Decision

Stocks are set to start a new week of trading in New York on Monday. (harly Triballeau / AFP via Getty Images)

Key Points

Stock futures are poised to begin trading ahead of the Federal Reserve’s interest rate decision on Wednesday.
The market expects the Federal Reserve will pause interest rates, putting the probability of a pause at more than 90% as of Sunday afternoon.
The week ahead also features earnings reports from Microsoft, Alphabet, and Amazon, alongside the September PCE price index release.

Stock futures are poised to begin trading later on Sunday ahead of the Federal Reserve’s next meeting to decide the direction of interest rates.

That decision is due out Wednesday afternoon. As of Sunday afternoon, the market expects the policymakers will leave rates where they are, putting the probability of a pause at more than 90%, according to the CME’s FedWatch tool.

This week also features the latest release of the Fed’s long-preferred inflation gauge, in the form of the personal consumption expenditures price index. That reading for September comes a day after the Fed’s decision.

The week ahead also includes earnings reports from Microsoft , Alphabet , and Amazon along with other S&P 500 companies.

The major U.S. stock indexes had mixed results last week. The Dow Jones Industrial Average closed up 0.41% last week, at 52,215.16, posting its largest three-week point and percentage gain since the week ending Aug. 14. The Dow is up 8.6% this year.

The S&P 500 index ended the week down 0.5%, at 7623.68, notching its largest two-week point and percentage decline since the week ending March 27, according to Dow Jones Market Data. The S&P 500 is up 11.4% year to date.

The tech-heavy Nasdaq Composite wrapped up the week down 0.7%, at 25,955.34, also its largest two-week percentage decline since the week ending March 27. The Nasdaq is up 11.7% this year.

Stocks may also be influenced by the continued conflict in the Persian Gulf. Oil futures rose to fresh highs on Friday, as fears of renewed U.S. military strikes against Iran compounded concerns about prolonged disruptions to energy supplies in the Middle East.

Front Month ICE Brent crude for December delivery ended the week up 6.4% at $116.72, in the largest one-week net and percentage gain since the week ending Sept. 11 and the highest settle value since April 29, according to Dow Jones Market Data.

U.S. benchmark West Texas Intermediate crude futures rose 3.8% to $103.27, finishing the week 2.3% higher.

The national average for regular unleaded was $4.829 a gallon on Sunday, according to AAA. That’s down from $4.492 a gallon a month ago, but up from $3.059 a year ago.

The average price for diesel was $6.374 a gallon, down from $6.502 a gallon month ago but up from $3.657 a year ago.

Write to Janet H. Cho at janet.cho@dowjones.com

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