The S&P 500 edged up on Wednesday, bouncing back a bit after ending a seven-day winning streak the day before, thanks in part to a drop in Oracle that raised doubts about how long the AI rally can last.
At the open, the S&P 500 was up 0.2%, the Nasdaq rose 0.4%, and the Dow added 65 points, or 0.1%.
The market’s mood is a bit shaky, thanks to the ongoing uncertainty around the US government shutdown.
On top of that, worries about a possible AI stock bubble and waning excitement in tech after a recent pullback from record highs are weighing on sentiment.
Meanwhile, gold jumped past $4,000 an ounce, signaling that investors are flocking to safe-haven assets while economic data remains in limbo.
Markets to watch Fed minutes closely
Investors are keeping a close eye on the Federal Reserve’s minutes from its September meeting, hoping for clues about where US monetary policy is headed in a tricky economic environment.
Most market watchers are betting on a 25-basis-point rate cut at the Fed’s next meeting later this month, driven by concerns about a softening labor market and stubborn inflation.
But with the ongoing US government shutdown delaying key economic data, the Fed’s decisions are anything but straightforward.
The minutes should show how policymakers are weighing the risks to jobs and inflation, even with limited information, giving insight into why easing might be on the table.
Everyone will be scanning the language for hints about rising employment risks or signs that inflation is finally nearing the 2% target.
Reports suggest the Fed is split on how fast and how far to cut rates, with some members wary of easing too aggressively and throwing inflation expectations off balance.
If the minutes point to broad support for rate cuts, it could reinforce market bets on further easing in October and December.
But if the wording is more cautious, investors might temper their expectations, especially if delayed jobs or inflation data come in hotter than expected.
What happened in pre-market trading?
US stock futures were showing modest gains in pre-market trading, with investors treading carefully ahead of the Fed’s meeting minutes.
Dow futures were up about 0.2%, S&P 500 futures rose roughly 0.17%, and Nasdaq 100 futures gained around 0.22%.
After a down day for the major indices, these small moves suggest traders are still hoping for some clarity on interest rates and economic policy.
Gold, meanwhile, kept its rally going, climbing past $4,000 an ounce for the first time as investors looked for safe-haven bets amid the government shutdown and ongoing inflation worries.
On the stock front, chip-equipment makers took a hit after US lawmakers pushed for broader sales restrictions to China.
Applied Materials and Lam Research each fell about 1%, while ASML dropped 2%. Not all news was negative as QuantumScape jumped 5% on a new solid-state battery partnership.
FedEx, however, slipped 2% after a major investor cut its stake.
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