U.S. equity futures were little changed early Tuesday, suggesting a muted start to the session as investors digest Monday’s mild retreat and brace for Wednesday’s Federal Reserve policy announcement.

With the central bank widely expected to deliver another 25-basis-point rate cut, traders appear hesitant to take bold positions. What comes next for monetary policy, however, is far less certain.

According to CME Group’s FedWatch Tool, there is an 87.4% probability that the Fed cuts rates by a quarter point on Wednesday. But odds drop to 67.5% that officials will hold rates steady at the January meeting, highlighting uncertainty around the path beyond December.

Market participants are expected to scrutinize both the Fed’s statement and Chair Jerome Powell’s press conference for clues on whether further easing is likely.

Soon after the opening bell, attention will turn to the Labor Department’s October job openings report, which could provide additional insight into labor-market trends.

Monday’s session saw stocks open stronger before gradually losing momentum. All three major indexes reversed early gains and spent the afternoon in negative territory. By the close, the Dow had fallen 215.67 points, or 0.5%, to 47,739.32; the Nasdaq slipped 32.22 points, or 0.1%, to 23,545.90; and the S&P 500 declined 23.89 points, or 0.4%, to 6,846.51.

The mild pullback likely reflected profit-taking after last week’s rally, which pushed the Nasdaq and S&P 500 to their highest closes in a month. Overall, trading remained relatively subdued as investors waited for the Fed’s decision.

Dan Coatsworth, head of markets at AJ Bell, noted, “Markets may not rally if we get a 25 basis-point cut, given how investors are already expecting it to happen.”
He added, “Instead, markets are only likely to move in a large way up or down if we don’t get a cut or if the cut is much bigger than expected.”

Among sectors, gold miners dropped significantly, with the NYSE Arca Gold Bugs Index falling 2.1%. Biotech stocks also struggled, dragging the NYSE Arca Biotechnology Index down 1.6%.

Meanwhile, utilities, natural gas, and healthcare names weakened, while networking, computer hardware, and semiconductor stocks managed to show some relative strength.

Get stock prices from InvestorsHub

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.