Traders on Tuesday night found U.S. stock futures with little change as they awaited the Federal Reserve's crucial December interest rate decision. The futures linked to the Dow Jones Industrial Average saw an addition of 57 points, equivalent to 0.1%. S&P 500 futures also added less than 0.1%, while Nasdaq 100 futures inched lower by less than 0.1%. During the regular session, the Dow slipped 267.58 points, or 0.61%, marking its longest nine-day losing streak since 1978. The S&P 500 dropped 0.39%, and the tech-heavy Nasdaq Composite fell 0.32%. These losses came ahead of the Federal Open Market Committee's policy decision due out on Wednesday afternoon. According to the CME FedWatch tool, Fed funds futures trading currently indicates a 95% chance that the central bank will cut interest rates by a quarter percentage point. Investors are closely observing Fed policymakers' Summary of Economic Projections and Fed Chair Jerome Powell's press conference, seeking clues about the future. The central bank is expected to manage runaway expectations of more rate cuts in the approaching year, especially as inflation remains persistent. "I think we'll get a cut tomorrow, but I think the language and the tenor will probably be as hawkish as we've seen from Powell in a while," said Ross Mayfield, investment strategist at Baird. "While they're not going to act on policy that hasn't yet been made, I think that they will be a little hesitant to commit to, say, four-plus rate cuts in 2025 when there's so much unsettled." In turn, hawkish commentary on Wednesday could lead to a selloff in stocks. However, Mayfield added that he was optimistic that volatility around Fed meetings usually doesn't last long. "We've seen some big moves on days where the Fed has announced a policy change and how it spoke — and these were either reversed later on, or gains were given back or losses cut later on. So I'm not overly worried about what happens in the immediate aftermath tomorrow," he added. Before Wednesday's bell, General Mills, Birkenstock, and Jabil are set to report their latest earnings. Results from Micron Technology and Lennar are due in the afternoon.
