A specialist trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Sept. 15, 2025.
Brendan McDermid | Reuters
Stock futures were little changed late Tuesday as traders prepared for a much-anticipated monetary policy decision and an even more important policy outlook from the Federal Reserve on Wednesday.
S&P 500 futures added 0.02%, while Nasdaq-100 futures advanced 0.02%. Futures contracts tied to the Dow Jones Industrial Average were up 13 points, or 0.03%.
Traders almost universally expect the Federal Reserve will lower interest rates on Wednesday, a move that could boost the U.S. economy amid signs the labor market is slowing even as inflation stays stubbornly above the central bank’s 2% target. Policymakers will also give more insight into their outlook for rates over the next year or so in the closely-watched “dot plot” grid that accompanies their quarterly Summary of Economic Projections.
Investors will also watch for any policy dissents from Fed policymakers after two such disagreeements at the last meeting in July. Traders have priced in a 96% chance that the Fed will cut rates by 25 basis points, or a quarter percentage point, and just 4% odds that the market will get a half point reduction Wednesday, according to numbers derived from interest rate futures trading at the CME Group.
Paul McCulley, former managing director at PIMCO told CNBC’s “The Exchange” on Tuesday that a more conservative, quarter-point rate cut is the most likely outcome of the Federal Open Market Committee’s meeting.
“Quite frankly, I don’t know how I would explain [a 50 basis point cut] in the current context without saying the labor market really is worrying me intensely, and I don’t think that’s the message that Chair Powell wants to communicate — at least not now,” McCulley said.
Stocks ended little changed by the end of Tuesday’s session.
The S&P 500 hit a fresh intraday record before pulling back later in the day, while the Dow Jones Industrial Average shed 125.55 points to close 0.27% lower at 45,757.90. The tech-heavy Nasdaq Composite failed to score any fresh gain Tuesday too, after closing at record on Monday.
Cytokinetics’ stock moves after hours
Cytokinetics‘ shares rose roughly 1% in after-hours trading on Tuesday, shortly after the biopharmaceutical company announced it plans to raise up to $550 million through an offering of convertible senior notes due in 2031.
— Liz Napolitano
Societe Generale’s Subadra Rajappa: “You could see an unwind” if Fed acts less dovish than market is pricing in
Stocks could fall if the Fed adopts a less dovish stance than expected over the coming months, Subadra Rajappa, head of U.S. rates at Societe Generale, said Tuesday on CNBC’s “Fast Money.”
“You could see an unwind…if there’s a sense that the Fed is not willing to act as aggressively as the market is pricing in,” Rajappa said.
The Fed will provide more insight into its rate outlook this week when it releases its widely followed “dot plot” grid.
— Liz Napolitano
Stock futures are little changed
Stock futures were little changed Tuesday night to start the session, as traders braced for the Fed’s key policy announcement.
Contracts tied to the major averages hovered around the flatline after a session in which the S&P 500 hit an intraday high.
— Fred Imbert
