Markets expect the Fed to pause rates in July but assign a 60.7% chance of a September hike amid oil price spikes and inflation concerns.
US stock futures edged higher in early trading Monday, with Dow Jones futures up 0.14% at 52,450, as investors awaited the Federal Reserve’s July policy meeting. S&P 500 and Nasdaq 100 futures rose 0.26% and 0.50%, respectively, trading near 7,520 and 28,920.
The Fed is widely expected to hold rates steady this month, though the CME FedWatch Tool now shows a 60.7% probability of a September hike. Rising oil prices, driven by US-Iran tensions, and persistent inflation risks have fueled expectations for tighter policy. Last week, the Nasdaq Composite fell 2.9%, the S&P 500 dropped 1.55%, and the Dow lost 0.93%, led by a near-9% decline in semiconductor stocks.
Investors are now focusing on upcoming earnings from Alphabet, Tesla, and Intel for market direction amid geopolitical uncertainty and shifting rate expectations.