U.S. Stock Futures Preview

U.S. stock futures edged lower on Monday, although September remains positive as investors await comments from Fed Chair Jerome Powell regarding future interest rate cuts.

By 05:45 ET (09:45 GMT), the Dow Futures contract was down 28 points (0.1%), S&P 500 Futures traded 5 points lower (0.1%), and Nasdaq 100 Futures dropped 25 points (0.1%).

Despite a slightly downbeat start, the U.S. central bank’s decision to cut interest rates by 50 basis points positions September favorably, even as it is historically the weakest month for the stock market.

The blue-chip Dow Jones Industrial Average has risen 1.8% month-to-date, hitting a record high at Friday’s session close. The S&P 500 rose 1.6%, while the tech-heavy Nasdaq advanced 2.3% this month.

Powell Set to Speak

Investor optimism is fueled by expectations that the Federal Reserve will announce another significant 50-basis point interest rate cut at its next meeting amid easing price pressures and declining labor demand.

Traders are focusing on comments regarding the economic outlook from Powell at the National Association for Business Economics annual meeting in Tennessee. This week ends with the October nonfarm payrolls report, with economists predicting an addition of 144,000 jobs.

Investors are eager to see if the upcoming jobs data will support a soft-landing scenario where the Fed manages to reduce inflation without severely impacting growth or reigniting recession fears.

Stellantis Cuts Annual Forecasts

On the corporate front, Carnival (NYSE:CCL) will announce its quarterly results, marking the end of the third quarter.

Meanwhile, Stellantis (NYSE:STLA) shares fell over 10% in premarket trading after the auto giant, owner of brands like Chrysler, Dodge, and Jeep, slashed its annual forecasts, citing industry struggles, increased costs for restructuring its U.S. operations, and competitive pressure from Chinese electric vehicles.

The consumer discretionary sector is positioned to be the best-performing segment of the S&P 500 for September, rising 7.3%, followed by utilities with a 6% gain. Conversely, financials, healthcare, and energy sectors have experienced declines this month.

Crude Gains as Israel Escalates Attacks

Oil prices increased slightly on Monday amidst concerns of a broader Middle East conflict following intensified Israeli attacks on Iranian-backed Hezbollah and Houthi groups.

As of 05:45 ET, Brent crude rose 0.2% to $71.69 per barrel, while U.S. crude futures (WTI) remained steady at $68.17 per barrel. Last week, both contracts faced declines due to demand worries after fiscal stimulus from China, the world’s second-largest economy, failed to boost market confidence.