SPX: S&P 500 Futures Zig Zag as Traders Brace for Fed’s Interest Rate Decision

Antsy markets ahead of the highly anticipated rate decision fuel volatility after stocks booked another loss on Tuesday.

🚨 Futures Turn Volatile

• Futures contracts tied to the S&P 500 (SPX) were zig-zagging above and under the flatline on Wednesday as pre-market action wasn’t anything to brag about on the breakfast table. Traders and investors remain jittery after a string of losing days last week and ahead of the keenly watched regular Fed decision. It’s the second of the year from a total of eight.
• Stocks packed in the S&P 500 washed out 1% on Tuesday, floating just above the correction move from last week. Not even the Magnificent Seven was able to save the broad index — Nvidia NVDA nosedived 3.4% as Jensen Huang’s speech at the annual GTC conference didn’t bring about any tech-loving buyers.

📉 DJI, IXIC Go Down

• The Dow Jones Industrial Average DJI and the Nasdaq Composite IXIC also finished Tuesday’s cash session in the red. The 30-stock benchmark slipped 0.6% and the tech-dense gauge gave up 1.7%. The losing day brought back the selloff wave from last week after equities notched two winning sessions.
• It all comes down to what’s about to go down today — the Federal Reserve is wrapping up its two-day regular policy-setting meeting. Jay Powell, Fed chief, will appear for a press conference and is expected to lay out the outlook for the central bank’s next moves on interest rates.

📢 Fed and the Outlook for US

• Traders and investors expect the bank to hold interest rates unchanged at the current 4.5% mark. So that’s not going to be news to anyone. What will, however, move markets, is the Fed’s forward-looking guidance. Powell, in his true fashion, is expected to shake things up with his message (usually it all starts as soon as “Good afternoon” lands.)
• If Powell strikes a cautious note on rate cuts (i.e. no rate cuts anytime soon), markets may react with a sharp downturn. His message on rate policy, inflation and unemployment would likely be tied to Donald Trump’s hostile policies around tariffs and trade wars.