SPX: S&P 500 Futures Tick Up Ahead of Key Fed Decision. To Cut or Not to Cut?

Sentiment is pointing toward a cut but what if there’s a surprise “we’re not in a rush” message?

📈 Futures Edge Higher Before Fed Call

• S&P 500 futures ticked up about 0.2% pre-market Monday as traders tiptoed into Fed week, cautiously optimistic but fully aware this meeting could flip the script in seconds.
• Major indexes are fresh off a second straight winning week, with the S&P now less than 1% from its all-time high. Momentum is there but it’s also fragile.
• Softer PCE inflation print last Friday boosted confidence that a cut is coming, giving bulls one last macro snack before the main course.

💸 Markets Bet Big on a Rate Cut

• Traders now price a nearly 90% chance the Fed cuts rates at Wednesday’s meeting, it’s a dramatic jump from 67% a month ago. Sentiment: “Please just cut already.”
• With inflation softening and growth cooling, the case for easing looks stronger, but the Fed has surprised before with its favorite phrase: “We’re not in a rush.”
• A steady-as-she-goes message could jolt markets, especially with stocks hovering so close to record highs.

🧨 What Happens If Powell Surprises?

• If the Fed holds or hints at delayed easing, expect a fast unwind in rate-cut trades, meaning potential pressure on equities and a possible pop in the dollar.
• But a clean cut paired with a calm press conference could ignite a year-end melt-up, lifting the S&P into new-high territory.
• What can you do now? Ideally, brace for volatility. Not just when the decision drops, but also when Powell turns on his mic for “Good afternoon.”