“A slim majority of the committee felt these risks warranted at least 75bp of cuts this year. Without additional data, we think this group, which most likely includes Chair Powell, will want to follow through on the Sep dot plot. Some doves might even argue that a prolonged government shutdown amplifies downside risks to activity.”
However, the report signaled potential policy uncertainty if the government reopens, stating:
“If the shutdown ends soon and the BLS simultaneously runs the Oct and Nov surveys, we might even get all three jobs reports (Sep through Nov) that would be due before the Dec FOMC meeting. In this scenario, our rule of thumb is that a Nov u-rate<=4.3% would keep the Fed on hold in Dec, while a u-rate >=4.5% (consistent with the SEP) would precipitate a cut. If we’re at 4.4%, the Dec decision will be a close call, and will hinge on the broader data flow (including inflation).”
US Stock Futures: Fed Chair Powell and Earnings in Focus
US stock futures eye five-day winning streaks on Wednesday despite a mixed start to the day. The Dow Jones E-mini fell 49 points, while the Nasdaq 100 E-mini and S&P 500 E-mini advanced 80 points and 12 points, respectively.
The Fed interest rate decision, QT announcement, and Fed Chair Powell’s press conference will be key market drivers. However, corporate earnings will also influence market sentiment.
Alphabet (GOOGL), Meta Platforms (META), and Microsoft (MSFT) will release earnings later today. Earnings will clash with the Fed’s interest rate decision and Powell’s press conference.
Markets are optimistic, leaving the Nasdaq 100 and the S&P 500 exposed to disappointing earnings.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
Beyond policy, traders are also watching critical technical thresholds that could influence near-term momentum. Despite the mixed morning, US stock futures traded well above key technical levels after hitting record highs the previous day. The EMAs signal bullish momentum.
The near-term trends will hinge on the Fed, corporate earnings, the US Senate, and trade talks on Thursday, October 30. Key levels traders should monitor include:
Dow Jones
- Resistance: the October 28 record high of 48,118, then 48,250.
- Support: 47,500, 47,000, the 50-day EMA (46,294).