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Market Update: Wall Street Futures Dip After S&P 500 Hits New High
Futures on Wall Street pointed lower on Wednesday following a new peak for the S&P 500 in the previous session. Investors are preparing to hear from Fed Governor Adriana Kugler, who will be among several policymakers commenting this week on last week’s significant interest rate cut.
1. Futures Decline
U.S. stock futures declined after the S&P 500 recorded its second consecutive all-time high.
As of 03:26 ET (07:26 GMT), the S&P 500 futures fell by 12 points (0.2%), Dow futures dropped by 96 points (0.2%), and Nasdaq 100 futures decreased by 77 points (0.4%).
Despite this, major indices on Wall Street ended the prior session positively, reflecting gains in international markets following China’s announcement of new stimulus measures aimed at revitalizing its economy. U.S.-listed shares of Chinese companies surged, and copper and lithium miners advanced as metal prices rose.
However, sentiment was somewhat tempered by a Conference Board report revealing an unexpected decline in U.S. consumer confidence for September, attributed to concerns over the labor market.
2. Fed's Kugler to Speak
Federal Reserve Governor Adriana Kugler is scheduled to speak on Wednesday, and markets are eager to hear her insights regarding last week’s substantial interest rate cut. Kugler’s speech at the Harvard Kennedy School is set for 16:00 ET. More Fed officials, including Chair Jerome Powell, are also expected to provide public comments this week.
On Tuesday, Fed Governor Michelle Bowman defended her vote against the 50-basis point cut, advocating instead for a more traditional quarter-percentage point reduction, citing that major inflation indicators remain "uncomfortably above" the Fed’s target.
Bowman’s position contrasted with other officials earlier in the week, who emphasized that the half-point cut was necessary to alleviate pressure on the economy amid fading inflation and increasing labor demand strains.$BTC
3. U.S. Investigates SAP and Carahsoft for Price Fixing
The U.S. government is investigating German software firm SAP and product reseller Carahsoft for potentially overcharging government agencies for over a decade, according to Bloomberg News. The Department of Justice is looking into allegations that SAP conspired with Carahsoft to fix prices on sales to the U.S. military and other government entities, with the investigation reportedly ongoing since at least 2022.
Carahsoft's Virginia offices were raided by FBI agents and military investigators on Tuesday.
4. Gold Hits New High$ETH
Gold prices dipped slightly after reaching a record high on Wednesday. Comments from Fed officials and the upcoming release of the Fed's preferred inflation measure on Friday could provide further insight into future borrowing costs.
5. Oil Prices Slide
Crude oil prices fell on Wednesday as traders reassessed the potential impact of China’s new monetary stimulus.
By 03:30 ET, the Brent contract was down 0.5% at $74.08 per barrel, while U.S. crude futures (WTI) fell 0.7% to $71.08 per barrel. Both benchmarks had increased by nearly 2% on Tuesday following China’s stimulus announcements, but traders noted that further assistance may be necessary to improve the economic outlook for the world’s largest crude importer.
Declining U.S. crude oil stockpiles provided some support for the market, with data from the American Petroleum Institute indicating a drop of 4.34 million barrels last week. Official numbers from the Energy Information Administration are expected later in the session.
As of 03:28 ET, spot gold was down 0.1% at $2,654.31 per ounce, having earlier touched a record high of $2,670.43 in Asian trading. The prospect of lower interest rates has supported gold prices, as investors weigh the lower opportunity cost of non-yielding assets, alongside safe-haven demand due to rising tensions in the Middle East.
