Written by Lisa Pauline Matakkal and Purvi Agarwal
(Reuters) – U.S. stock index futures fell on Monday as investors remained optimistic ahead of an expected Federal Reserve interest rate cut later this week and key data releases that will set policy direction next year. Market prices rose.
The Fed's final interest rate decision of the year is scheduled for Wednesday, and traders are pricing in a more than 97% chance of a 25 basis point cut, according to CME's FedWatch.
But the main focus will be on policymakers' outlook for next year, with an updated 'dot plot' of the outlook set amid growing expectations that the pace of rate cuts will ease amid strong economic growth and sustained inflation. It is scheduled to be done.
“While the main focus is on the Fed generally expected to cut rates by 25 basis points, we believe the Fed will reduce expectations for further rate cuts further down the line,” SEB analysts said.
Important data material also awaits investors this week. S&P Global's December manufacturing and services PMI report will be released at 9:45 a.m. (Eastern time) on the same day, and industrial production statistics, retail sales, and personal consumption expenditure statistics are also scheduled to be released throughout this week.
As of 7:05 a.m. ET, the Dow E-mini was up 52 points, or 0.12%, the S&P 500 E-mini was up 11 points, or 0.18%, and the Nasdaq 100 E-mini was up 65.75 points, or 0.30%.
While the benchmark S&P 500 and blue-chip Dow ended last week lower, the tech-heavy Nasdaq topped the $20,000 mark for the first time, marking its fourth straight week of gains.
Stocks have risen significantly this year as artificial intelligence stocks rose, the Federal Reserve began its rate-cutting cycle and pro-business policies expected from President-elect Donald Trump's administration boosted stocks.
Shares of MicroStrategy rose 3.5% in premarket trading as the software company and Bitcoin buyer joined the tech-heavy Nasdaq 100 index.
Palantir and Axon Enterprises rose 0.4% and 2.3%, respectively, and these stocks will also be added to the reconstituted index. Changes will take effect on December 23rd.
Among the stocks scheduled to be removed from the index, super microcomputers fell 13.5%.
Cryptocurrency stocks rose after President Trump signaled plans to create a U.S. Bitcoin Strategic Reserve similar to the Strategic Petroleum Reserve, with Bitcoin briefly above $106,000.
Coinbase Global rose 1.8%, while Bitcoin miner MARA Holdings rose 2.3%.
Honeywell International rose 3% after the conglomerate said it was considering spinning off its aerospace business.
(Reporting by Lisa Matakkal and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)
