Futures Mixed as Oil Surges 4.4% Before Fed Verdict
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- S&P 500 and Nasdaq futures edged higher while Dow E-minis fell 0.28% (146 points) ahead of the Fed's 2:00 pm ET monetary policy verdict, reflecting investor caution on the rate path.
- Crude prices jumped 4.4% to $87.75 a barrel as Middle East tensions flared, adding an inflation wrinkle to the Fed's deliberations.
- LSEG data shows traders pricing a 38% chance of a rate hike at this meeting, with markets expecting at least 25 basis points of increases by year-end.
- SK Hynix quarterly results fell short of lofty investor expectations despite AI chip demand, dragging chip stocks lower and pushing the Nasdaq to a three-month low.
- Seagate gained 5.7% on a bullish quarterly forecast while KLA fell 7.5% despite beating estimates; Ford rose 5.5% after raising its annual profit outlook for the second time this year.
- Fed Chairman Kevin Warsh's post-decision comments will be parsed closely, as he has signaled the central bank will stop offering forward guidance on interest rates.
- S&P 500 earnings are running well ahead of the historical pace, with 85.2% of the 169 companies that have reported surpassing analyst expectations versus a 68% long-term average.
Why it matters: A 4.4% surge in oil to $87.75 driven by Middle East tensions forces Chair Warsh to address an inflation backdrop that traders now give a 38% chance of prompting a hike — yet the broader market signals are split, with the Dow at a two-week high and the Nasdaq at a three-month low. With the Fed withholding forward guidance, Warsh's tone alone will steer the rotation already underway into consumer staples and healthcare.
