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U.S. Stock Futures Hold Steady Amid Anticipation of Fed Rate Cut in 2025
U.S. stock futures traded within tight ranges early on September 17, as investors braced for the Federal Reserve’s highly anticipated policy shift—the potential first interest rate cut of 2025. Activity in equity futures reflected the cautious sentiment ahead of the pivotal announcement, signaling the market’s heightened focus on monetary policy decisions.
Stock Futures Exhibit Minimal Movement Ahead of Fed Decision
The Dow Jones Industrial Average futures (YM=F) showed a marginal 0.05% uptick, hovering at 46,143 points. Conversely, futures tied to the S&P 500 (ES=F) and Nasdaq 100 (NQ=F) dropped slightly by 0.04% each. This subdued activity mirrors the mixed closing in the prior session, where markets treaded water amidst anticipation of the Federal Reserve’s policy meeting. Investors are keenly observing every signal to position themselves optimally for the impact of the Fed’s next move.
Near-Certain Fed Rate Cut: Spotlight on Dot Plot and Powell’s Guidance
Market consensus strongly supports the likelihood of the Federal Reserve announcing a 25-basis-point (0.25 percentage point) rate cut during its policy meeting. Current pricing models estimate the probability of such a cut at an overwhelming 96%. While this initial move seems inevitable, the wider uncertainty lies in how many additional rate cuts may follow throughout the year and their timing.
Central to shaping market sentiment will be the updated dot plot—the Federal Reserve’s visual representation of policymakers' interest rate forecasts—as well as commentary from Federal Reserve Chair Jerome Powell during his post-meeting press conference. These elements are expected to provide crucial insights into forward guidance, influencing the trajectory of equity and bond markets alike.
Political Headwinds: Trump’s Impact on Fed Independence
The Federal Reserve's decision comes in a politically charged context, with President Donald Trump ramping up criticism of Fed Chair Jerome Powell. Trump has consistently voiced dissatisfaction regarding monetary policy, further amplifying the focus on the central bank’s autonomy.
Adding to tensions, Steven Moore, Trump’s appointee, was narrowly confirmed by the Senate with a 48-47 vote to join the Fed’s Board of Governors. Moore’s decision to take a leave of absence from his role as a White House economic advisor has sparked debate about potential conflicts of interest, renewing fears over political influence within the institution.
Separately, Trump’s legal challenge attempting to remove Governor Lisa Cook, another key Fed member, hit a roadblock. An appeals court rejected the motion, ensuring Cook remains on the board and able to participate in critical policy decisions during this week’s meeting. These developments underscore the tightrope the Federal Reserve continues to walk between its mandated independence and external pressures.
Market Movers: Nvidia, Cracker Barrel, and General Mills
In corporate news, Nvidia (NVDA) shares fell by 1.5% in premarket hours following a Financial Times report revealing that China is banning Alibaba and other major tech firms from procuring custom AI chips—a blow to Nvidia’s supply chain relationships in a key market.
Cracker Barrel (CBRL) saw its stock dip 2.25% ahead of the restaurant chain’s earnings report, as public discourse swirled around its controversial logo redesign. Meanwhile, General Mills (GIS) is scheduled to announce its earnings later today, which investors will closely examine for signs of how inflationary pressures are affecting consumer staples.
Housing Starts Data and Broader Economic Signals
On the macroeconomic front, August housing starts data is set for release later today. These figures are expected to offer fresh clues regarding the extent of the U.S. economic slowdown, particularly within the housing sector—a critical barometer of overall economic health. Analysts suggest that decelerating housing activity may reinforce the case for more dovish monetary policy from the Fed moving forward.
Geopolitical Tensions: U.S.-China Relations Under the Microscope
Market participants are also eying geopolitical developments later this week, as President Donald Trump and China’s President Xi Jinping are scheduled to meet to discuss trade and issues surrounding TikTok. Lingering trade disputes and technology-related tensions continue to inject uncertainty into global markets, raising concerns over potential volatility linked to U.S.-China relations. Any major headlines from this meeting could further sway investor sentiment in unpredictable ways.
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