Futures inch up in holiday-thinned week; concentrate on Fed’s rate-cut plans

(Reuters) – U.S. inventory index futures rose on Tuesday as traders sought perception into the Federal Reserve’s coverage plans following a decline in Treasury yields within the final session and braced for any bulletins on the tariffs entrance.

Minutes from the U.S. Federal Reserve’s January assembly, the place it held rates of interest unchanged at 4.25% to 4.5%, are due on Wednesday.

When the U.S. markets have been closed for the Presidents’ Day vacation on Monday, Fed Governor Christopher Waller mentioned his “baseline” view was that U.S. President Donald Trump’s new tariffs would have solely a modest influence on costs.

Philadelphia Fed President Patrick Harker mentioned he noticed no purpose to alter interest-rate coverage proper now.

Hawkish commentary from Fed Chair Jerome Powell in his semi-annual testimony to Congress, together with shopper costs and producer costs knowledge final week, led to uncertainty over the Fed’s rate-cut plans this 12 months.

Merchants presently see at the least one 25-basis-point lower and a 58% likelihood of a further lower by December, based on LSEG knowledge.

“Contemplating the Fed nonetheless views its financial coverage as restrictive — implying fee cuts can be wanted sooner or later — we proceed to count on easing within the second half of 2025 as inflation moderates over time,” Mark Haefele, chief funding officer at UBS World Wealth Administration, mentioned in a be aware.

Friday’s weaker-than-expected retail gross sales studying pulled Treasury yields decrease, doubtless preserving the U.S. central financial institution on monitor to chop borrowing prices this 12 months.

Wall Road’s foremost inventory indexes clocked weekly positive aspects within the midst of a uneven interval for international markets final week as Trump’s imposition of tariffs on metal and aluminum imports, together with plans for reciprocal tariffs, sparked volatility.

The S&P 500 is about 0.2% from its all-time highest stage, hit about 4 weeks in the past, as of Friday’s shut.

In the meantime, international risk-taking was boosted by speculations of a peace deal between Russia and Ukraine, after Russian and U.S. officers met for bilateral talks in Saudi Arabia on Tuesday.

At 05:01 a.m. ET, Dow E-minis have been up 10 factors, or 0.02%, S&P 500 E-minis have been up 15 factors, or 0.24%, and Nasdaq 100 E-minis have been up 76.25 factors, or 0.34%.

Earnings season will begin scaling down this week, with greater than 380 of the S&P 500 corporations already having reported quarterly outcomes.

Retail big Walmart’s earnings, a gauge to know how the American shopper is faring, are due later this week.

S&P 500 corporations are anticipated to have posted a year-over-year earnings progress of 15.3%, up from an expectation of lower than 10% at first of 2025, based on knowledge compiled by LSEG.

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