U.S. stock futures rose modestly on Tuesday morning as investors awaited a critical week for monetary policy and economic data. Futures tied to the S&P 500 gained 0.17%, while Nasdaq 100 futures advanced 0.28%, extending Monday’s rally that pushed both indexes to fresh record highs. Dow futures, by contrast, slipped slightly by 0.04%, reflecting caution among value-oriented stocks. The moves came as markets positioned for the Federal Reserve’s two-day policy meeting, which is widely expected to deliver a 25 basis point rate cut aimed at supporting employment amid signs of a cooling labor market.

Concerns about the labor market have dominated the conversation in recent weeks. Job openings have fallen, weekly jobless claims remain stubbornly elevated, and wage growth has slowed compared with earlier in the year. These signals suggest the Fed must shift focus from inflation toward protecting jobs, a key part of its dual mandate. Data from LSEG showed that traders are pricing in about 68 basis points of easing by the end of 2025, beginning with Wednesday’s expected rate cut. Luigi Speranza, global head of markets at BNP Paribas, said risks now lie “much more on the employment side” and noted that tariff-related price pressures have so far remained limited, giving the Fed more room to act.

All eyes are also on August retail sales data, due at 8:30 a.m. ET, which could provide important insight into the health of U.S. consumers. Retail spending remains a critical driver of the economy, but higher borrowing costs, rising prices, and weakening real wages have put pressure on household budgets. Economists expect modest growth in sales, though the details excluding autos and gas will be closely scrutinized to assess the strength of underlying demand. A weaker-than-expected report would reinforce the case for easier policy, while strong numbers could complicate expectations for aggressive rate cuts.

Individual stocks were also in focus during premarket trading. Oracle rose nearly 5% after reports that it could play a role in a consortium enabling TikTok’s continued operations in the United States under a potential U.S.-China deal. Webtoon Entertainment surged more than 39% following its partnership with Disney to launch a digital comics platform featuring Marvel and Star Wars content. By contrast, Dave & Buster’s tumbled more than 15% after missing second-quarter revenue and profit estimates, underscoring challenges in consumer discretionary spending. Alphabet also made headlines as it surpassed a $3 trillion valuation for the first time, boosted by strong gains in technology and its “AI First” strategy.

Despite the gains, investors remain mindful of seasonal trends. September has historically been the weakest month for U.S. equities, with the S&P 500 losing an average of 1.5% since 2000. Yet this year, markets have defied the pattern thanks to enthusiasm around artificial intelligence, strong corporate earnings, and optimism about Fed support. Still, risks are looming. A strong retail sales report could temper the Fed’s dovish stance, while weak data may fuel recession fears despite the expected rate cut. With the central bank’s decision and key economic indicators on the horizon, this week is set to define market sentiment heading into the final quarter of the year.

Source: Reuters.