US Stock Futures Drop Ahead of August Inflation Report and Fed Rate Decision

Team FS

11/Sep/2024

What's covered under the Article:

US stock futures declined as investors awaited the August inflation report, influencing Fed rate cut expectations.

Markets assign a 66% chance of a 25 basis point rate cut by the Federal Reserve, with some expecting a 50 bps reduction.

Oracle's stock surged 11.4% after strong earnings and a deal with Amazon Web Services, while GameStop dropped 10.4% due to an SEC filing amendment.

US stock futures experienced a decline on Wednesday as investors prepared for the August consumer inflation report, which is anticipated to influence the scale of the Federal Reserve's interest rate cut decision next week. The report is crucial as it could determine whether the Fed will implement a more modest 25 basis point rate cut or a larger 50 basis point reduction. According to the CME’s FedWatch Tool, the markets are currently assigning a 66% chance for a 25 bps cut and a 34% chance for a 50 bps reduction.

In the meantime, traders also kept a close eye on the first debate between Kamala Harris and Donald Trump, which may have further implications for the political and economic landscape.

In Tuesday's regular trading, the Dow Jones Industrial Average fell by 0.23%, while the S&P 500 and Nasdaq Composite saw gains of 0.45% and 0.84%, respectively. Among the sectors, real estate, consumer discretionary, and technology outperformed the broader market. Conversely, the energy and financial sectors were the only ones to decline.

Oracle saw a significant boost in its stock price, surging by 11.4% after surpassing earnings estimates and securing a significant deal with Amazon Web Services. On the other hand, GameStop faced a sharp decline of 10.4% in after-hours trading. This drop came after the company amended an open market sale agreement with the US SEC, which raised concerns among investors.

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US Stock Futures Drop Ahead of August Inflation Report and Fed Rate Decision

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